The Role of Brazilian Regions in the Global Value Chain

01.   59th Annual North American Meetings of the Regional Science Association International. Ottawa, Canada - November 7th - 10th, 2012.

Department of Economics, FEA-USP Working Paper No. 2013-15

21 Pages Posted: 1 Mar 2014

See all articles by Erik Dietzenbacher

Erik Dietzenbacher

University of Groningen - Department of Economics

Joaquim Guilhoto

Organization for Economic Co-Operation and Development (OECD) - Directorate for Science, Technology and Industry (STI); University of Sao Paulo

Denise Imori

University of São Paulo (USP)

Date Written: 2012

Abstract

In the last couple of decades, production processes have been characterized by their fragmentation, which crosses the borders of countries more and more. This coincides with the common viewpoint that products and services are now made in global value chains and that ‘trade in value added’ might be a better approach for the measurement for international trade. The same applies at the regional level, and perhaps even to a larger extent. The present paper analyzes the role of Brazilian states in the global value chain. Since fragmentation of production processes leads to an interdependent structure which has to be accounted for, the input-output methodology seems especially suitable. Therefore, in its empirical application, the paper combines a world input-output table covering 40 countries (and the rest of the world as a 41st country) with an inter-regional input-output table covering each of the Brazilian states, for the year 2008. Our results show that the average country trades approximately twice as much in value added (as a share of country’s value added) than Brazil: the participation of Brazil in the global value chain is somewhat limited. We notice, however, important differences among states, both in terms of trade volume and of relevant industries that account for the generation of value added. The paper also further analyzes the Brazilian value chain and the trade relations of Brazilian states with China and USA, exploring the regional heterogeneities involving such relations.

Keywords: International trade, input-output analysis, regional economics

JEL Classification: F10, R15, R11

Suggested Citation

Dietzenbacher, Erik and Guilhoto, Joaquim José Martins and Imori, Denise, The Role of Brazilian Regions in the Global Value Chain (2012). 01.   59th Annual North American Meetings of the Regional Science Association International. Ottawa, Canada - November 7th - 10th, 2012. , Department of Economics, FEA-USP Working Paper No. 2013-15, Available at SSRN: https://ssrn.com/abstract=2402274 or http://dx.doi.org/10.2139/ssrn.2402274

Erik Dietzenbacher

University of Groningen - Department of Economics ( email )

P.O. Box 800
9700 AV Groningen
Netherlands
+31 (0)50 3633813 (Phone)

Joaquim José Martins Guilhoto (Contact Author)

Organization for Economic Co-Operation and Development (OECD) - Directorate for Science, Technology and Industry (STI) ( email )

Paris
France

University of Sao Paulo ( email )

Av. Prof. Luciano Gualberto, 908
FEA2
Sao Paulo, 05508-010
Brazil
+ 55 011 3091-5870 (Phone)
+ 55 011 3813-4743 (Fax)

Denise Imori

University of São Paulo (USP) ( email )

Rua Luciano Gualberto, 315
São Paulo, São Paulo 14800-901
Brazil

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