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Trade liberalization and industrial concentration: Evidence from Brazil

  • Cavalcanti Ferreira, Pedro
  • Facchini, Giovanni

This paper applies an endogenous lobby formation model to explain the extent of trade protection granted to Brazilian manufacturing industries during the 1988-1994 trade liberalization episode. Using a panel data set covering this period, we find that even in an environment in which a major regime shift has been introduced,more concentrated sectors have been able to obtain policy advantages, that lead to a reduction in international competition. The importance of industry structure appears to be substantial: In our baseline speci.cation, an increase in concentration by 20% leads to an increase in protection by 5%-7%.

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Article provided by Elsevier in its journal The Quarterly Review of Economics and Finance.

Volume (Year): 45 (2005)
Issue (Month): 2-3 (May)
Pages: 432-446

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Handle: RePEc:eee:quaeco:v:45:y:2005:i:2-3:p:432-446
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620167

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