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Impacts of trade liberalization on countries’ sectoral structure of production and trade: A structural decomposition analysis

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  • Magacho, Guilherme R.
  • McCombie, John S.L.
  • Guilhoto, Joaquim J.M.

Abstract

This study extends structural decomposition analysis (SDA) to consider the substitution between domestic and imported inputs. The approach provides a detailed investigation of the consequences on economic growth following changes in countries’ supply chains. We apply the method to data from Brazil and other countries. The results suggest that the substitution of imported for national inputs is a key factor in SDA, assuming that the impact of technological change is underestimated if this substitution is not taken into account.

Suggested Citation

  • Magacho, Guilherme R. & McCombie, John S.L. & Guilhoto, Joaquim J.M., 2018. "Impacts of trade liberalization on countries’ sectoral structure of production and trade: A structural decomposition analysis," Structural Change and Economic Dynamics, Elsevier, vol. 46(C), pages 70-77.
    • Handle: RePEc:eee:streco:v:46:y:2018:i:c:p:70-77
    DOI: 10.1016/j.strueco.2018.04.003
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