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Regional Imbalances and Market Potential in Brazil

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  • Pedro Amaral
  • Mauro Lemos
  • Rodrigo Simões
  • Flávia Chein

Abstract

Abstract This paper estimates the effects of market potential on regional wage imbalances between Brazilian municipalities. Using data from the 1980, 1991 and 2000 Brazilian Census, which render 3,630 comparable municipality areas, we estimate the NEG's wage equation using a spatial panel data model accounting for endogeneity. Our results show new evidence of a strong relationship between market potential and wages, indicating that regional attributes, as well as individual, are correlated with wages and their regional disparities. Inégalités régionales et potentiel commercial au Brésil RÉSUMÉ La présente communication évalue les effets du potentiel commercial des inégalités salariales régionales entre différentes municipalités au Brésil. Sur la base de données extraites des recensements effectués en 1980, 1991 et 2000 au Brésil, permettant de comparer 3,630 municipalités, nous sommes en mesure d'estimer l’équation salariale de NEG en utilisant un modèle de données de panel spatial, en tenant compte de l'endogénéité. Nos résultats fournissent de nouvelles informations sur l'existence de rapports étroits entre le potentiel commercial et les salaires, indiquant la corrélation entre les attributs, tant régionaux qu'individuels, et les salaires ainsi que leurs disparités régionales. Desequilibrios regionales y potencial de mercado en Brasil EXTRACTO Este trabajo estima los efectos del potencial de mercado sobre los desequilibrios salariales regionales entre municipalidades brasileñas. Utilizando datos extraídos de los censos brasileños de 1980, 1991 y 2000, que incluyen 3630 áreas municipales comparables, estimamos la ecuación salarial de NEG empleando un modelo espacial de datos de panel que tiene en cuenta la endogeneidad. Nuestros resultados muestran nueva evidencia de una fuerte relación entre el potencial de mercado y los salarios, indicando que los atributos regionales, así como los individuales, se correlacionan con los salarios y sus disparidades regionales.

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  • Pedro Amaral & Mauro Lemos & Rodrigo Simões & Flávia Chein, 2010. "Regional Imbalances and Market Potential in Brazil," Spatial Economic Analysis, Taylor & Francis Journals, vol. 5(4), pages 463-482.
    • Handle: RePEc:taf:specan:v:5:y:2010:i:4:p:463-482
    DOI: 10.1080/17421772.2010.516441
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    Citations

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    Cited by:

    1. Ana Maria Bonomi Barufi, 2014. "Regional labor markets in Brazil: the role of skills and agglomeration economies," Working Papers, Department of Economics 2014_18, University of São Paulo (FEA-USP).
    2. Ana Maria Bonomi Barufi & Eduardo Amaral Haddad & Peter Nijkamp, 2016. "Industrial scope of agglomeration economies in Brazil," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(3), pages 707-755, May.
    3. Stuart Donovan & Thomas de Graaff & Henri L. F. de Groot & Carl C. Koopmans, 2024. "Unraveling urban advantages—A meta‐analysis of agglomeration economies," Journal of Economic Surveys, Wiley Blackwell, vol. 38(1), pages 168-200, February.
    4. Kevin A. Hassett & Aparna Mathur, 2015. "A spatial model of corporate tax incidence," Applied Economics, Taylor & Francis Journals, vol. 47(13), pages 1350-1365, March.
    5. Barufi, Ana Maria, 2014. "Agglomeration Economies in the Brazilian Formal Labor Market," TD NEREUS 3-2014, Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS).
    6. Burhan Can Karahasan & Fırat Bilgel, 2020. "Market access and regional dispersion of human capital accumulation in Turkey," Review of Development Economics, Wiley Blackwell, vol. 24(3), pages 1073-1101, August.
    7. Bernard FINGLETON & Silvia PALOMBI, 2013. "The Wage Curve Reconsidered: Is It Truly An 'Empirical Law Of Economics'?," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 38, pages 49-92.
    8. Bruna, Fernando, 2024. "Market Potential, panel data, and aggregate fluctuations: All that glitters is not gold," MPRA Paper 121949, University Library of Munich, Germany.

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    More about this item

    Keywords

    Regional imbalances; market potential; New Economic Geography; Brazil; J31; R12;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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