IDEAS home Printed from https://ideas.repec.org/a/ecr/col070/38837.html

Exports from the Brazilian automotive sector to the Southern Common Market: Trade diversion or cost reduction?

Author

Listed:
  • Massuquetti, Angélica
  • Azevedo, André Filipe Zago de

Abstract

The automotive sector is one of the sectors in which trade between mercosur countries has grown most strongly. This article examines the possibility that trade diversion occurred in that sector during the period 1991-2010, assuming that product costs fell as a result of market expansion. The analysis is based on the concepts of “cost reduction” and “trade suppression” coined by Corden (1972), which capture the effects of economies of scale. Indices of regional orientation and revealed comparative advantages are used in combination to assess whether the trade bloc is evolving in line with comparative advantages. The results suggest efficiency gains for automotive-sector products, exports of which from Brazil to mercosur grew more vigorously because the expanded and relatively protected market made it possible to exploit the economies of scale that are characteristic of the automotive industry.

Suggested Citation

  • Massuquetti, Angélica & Azevedo, André Filipe Zago de, 2015. "Exports from the Brazilian automotive sector to the Southern Common Market: Trade diversion or cost reduction?," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    • Handle: RePEc:ecr:col070:38837
    as

    Download full text from publisher

    File URL: http://repositorio.cepal.org/handle/11362/38837
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Yeats,Alexander James, 1997. "Does Mercosur's trade performance raise concerns about the effects of regional trade arrangements?," Policy Research Working Paper Series 1729, The World Bank.
    2. Corden, W M, 1972. "Economies of Scale and Customs Union Theory," Journal of Political Economy, University of Chicago Press, vol. 80(3), pages 465-475, May-June.
    3. repec:bla:worlde:v:22:y:1999:i:4:p:477-512 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Longo, Robert & Sekkat, Khalid, 2004. "Economic Obstacles to Expanding Intra-African Trade," World Development, Elsevier, vol. 32(8), pages 1309-1321, August.
    2. Pachara Lochindaratn, 2007. "Market Size, Market Structure, and Welfare Improving Regional Economic Integration: The Computable General Equilibrium Modelling Approach," EcoMod2007 23900053, EcoMod.
    3. Richard Pomfret, 2003. "Trade and Exchange Rate Policies in Formerly Centrally Planned Economies," The World Economy, Wiley Blackwell, vol. 26(4), pages 585-612, April.
    4. Javeria Maryam & Ashok Mittal, 2019. "An empirical analysis of India’s trade in goods with BRICS," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 66(4), pages 399-421, December.
    5. Paul Wonnacott & Ronald Wonnacott, 2005. "What's the Point of Reciprocal Trade Negotiations? Exports, Imports, and Gains from Trade," The World Economy, Wiley Blackwell, vol. 28(1), pages 1-20, January.
    6. Pomerlyan, Evgeniya & Belitski, Maksim, 2023. "Integration - Growth relationship: A literature review and future research agenda using a TCCM approach," European Management Journal, Elsevier, vol. 41(6), pages 1106-1118.
    7. Eduard Marinov, 2015. "Economic Determinants of Regional Integration in Developing Counties," International Journal of Business and Management, International Institute of Social and Economic Sciences, vol. 3(3), pages 22-39, August.
    8. Lucian Cernat, 2001. "ASSESSING REGIONAL TRADE ARRANGEMENTS: ARE SOUTH–SOUTH RTAs MORE TRADE DIVERTING?," International Trade 0109001, University Library of Munich, Germany.
    9. Dunning John H. & Lundan Sarianna M. & Eckes Alfred E. & Bryant Sarah K. & Unger Michael L. & Shelburne Robert C. & Cernat Lucian, 2001. "Global Economy Quarterly, Issue 3," Global Economy Journal, De Gruyter, vol. 2(3), pages 109-109, December.
    10. Skripnitchenko, Anatoliy & Abbott, Philip C., 2003. "Preferential Trade Arrangements In Apparel Exports From The Caribbean To The U.S.: A Dynamic Investment Approach," 2003 Annual meeting, July 27-30, Montreal, Canada 21977, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Ferdj Younes, 2024. "The impact of the COVID-19 pandemic on regional economic integration in the Maghreb region – an Algerian perspective," Economic and Regional Studies / Studia Ekonomiczne i Regionalne, Sciendo, vol. 17(2), pages 290-313.
    12. Mr. Enzo Croce & Mr. V. Hugo Juan-Ramon & Mr. Feng Zhu, 2004. "Performance of Western Hemisphere Trading Blocs: A Cost-Corrected Gravity Approach," IMF Working Papers 2004/109, International Monetary Fund.
    13. W.G.C.M. Haack, 1983. "The Selectivity of Economic Integration Theories: A Comparison of Some Traditional and Marxist Approaches," Journal of Common Market Studies, Wiley Blackwell, vol. 21(4), pages 365-388, June.
    14. Luo, Erga & Yan, Ru & He, Yaping & Han, Zhen & Feng, Yiyu & Qian, Wenrong & Li, Jinkai, 2024. "Does biogas industrial policy promote the industrial transformation?," Resources Policy, Elsevier, vol. 88(C).
    15. Tran-Nam, Binh, 2016. "A critical review of the normative theory of international trade," International Journal of Development and Conflict, Gokhale Institute of Politics and Economics, vol. 6(1), pages 25-46.
    16. Salazar-Xirinachs, Jose M., 2002. "Proliferation of sub-Regional Trade Agreements in the Americas: an assessment of key analytical and policy issues," Journal of Asian Economics, Elsevier, vol. 13(2), pages 181-212.
    17. Jaime De Melo & Arvind Panagariya & Dani Rodrik, 2015. "The New Regionalism: A Country Perspective," World Scientific Book Chapters, in: Developing Countries in the World Economy, chapter 14, pages 323-357, World Scientific Publishing Co. Pte. Ltd..
    18. Idrisov, Georgy & Taganov, Boris, 2013. "Regional Trade Integration in the CIS Area," MPRA Paper 50952, University Library of Munich, Germany.
    19. Piotr Misztal, 2014. "Trade integration and business cycles synchronization of Poland (Integracja handlowa a synchronizacja cykli koniunkturalnych Polski i Unii Europejskiej)," Research Reports, University of Warsaw, Faculty of Management, vol. 1(17), pages 62-73.
    20. Estevadeordal, Antoni & Shearer, Matthew & Suominen, Kati, 2009. "Market Access Provisions in Regional Trade Agreement," IDB Publications (Working Papers) 2524, Inter-American Development Bank.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecr:col070:38837. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Biblioteca CEPAL (email available below). General contact details of provider: https://edirc.repec.org/data/eclaccl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.