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Internal and International Vertical Specialization– Estimations For Brazil and new Approach to Gravity Models

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  • Guilhoto, Joaquim José Martins
  • Siroën, Jean-Marc
  • Yucer, Ayçil

Abstract

WTO, OECD with many others, suggest the trade in value-added would be a “better” measure to understand the impact of trade on employment, growth, production etc. when import content in exports is important. We use in this work an Input-Output table for 2008, to calculate the value-added exported by Brazilian states. We distinguish the value-added exported directly by the state itself or indirectly via other states. First, by using value-added we define the extent of vertical specialization among Brazilian states. Exported value-added are then used in a gravity model to determine the structure of trade in value-added terms. We also define a trilateral gravity structure which permits to control for the vertical specialization between states and to estimate the trade determinants at three steps: origin state, re-exporter state and importer country.

Suggested Citation

  • Guilhoto, Joaquim José Martins & Siroën, Jean-Marc & Yucer, Ayçil, 2013. "Internal and International Vertical Specialization– Estimations For Brazil and new Approach to Gravity Models," MPRA Paper 46897, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:46897
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    File URL: https://mpra.ub.uni-muenchen.de/46897/1/MPRA_paper_46897.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Vertical Specialization; Input-Output Analysis; Gravity Model; Brazil; intra-national trade;

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F15 - International Economics - - Trade - - - Economic Integration
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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