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Spatial dynamics of gross domestic product per capita in Brazilian municipalities

Author

Listed:
  • Luan Marca

    (Pontifical Catholic University of Rio Grande do Sul)

  • Luis Fernando Tavares Vieira Braga

    (Pontifical Catholic University of Rio Grande do Sul)

  • Adelar Fochezatto

    (Pontifical Catholic University of Rio Grande do Sul)

  • Augusto Mussi Alvim

    (Pontifical Catholic University of Rio Grande do Sul)

Abstract

This study investigates the role of spatial spillover effects in regional development (GDP per capita) across 5531 Brazilian municipalities between 2010 and 2021. We integrate sectoral composition, economic complexity, climatic shocks, and public policies into a spatial econometric framework (GMM-SDM). Our results show that industrialization drives local growth (+ 1.5%) but produces negative spillovers (− 1.04%), reflecting a backwash effect due to resource concentration. Employment and export complexity exhibit similar patterns, amplifying regional asymmetries by drawing talent away from peripheral areas. The services sector exerts negative local impacts (− 1.7%) but positive spillovers (+ 1.8%), while agriculture yields modest local gains (+ 0.38%) and spillovers (+ 0.15%), particularly in modernized regions. Hydrological disasters reduce local GDP but trigger compensatory spillovers, possibly via economic relocation. Public policies have mixed outcomes: vocational training underperforms locally, whereas housing programs generate positive spillovers through asymmetric absorption capacity. We demonstrate that Brazil’s regional inequalities are reinforced by spatially asymmetric externalities. We propose leveraging agro-industrial value chains to diffuse productivity gains, mitigate polarization, and foster resilient regional networks.

Suggested Citation

  • Luan Marca & Luis Fernando Tavares Vieira Braga & Adelar Fochezatto & Augusto Mussi Alvim, 2026. "Spatial dynamics of gross domestic product per capita in Brazilian municipalities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 75(1), pages 1-30, March.
    • Handle: RePEc:spr:anresc:v:75:y:2026:i:1:d:10.1007_s00168-025-01439-6
    DOI: 10.1007/s00168-025-01439-6
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    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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