Comparative Advantage of Rio De Janeiro
Discussion Paper No. 900
16 Pages Posted: 26 Mar 2003
Date Written: August 2002
Economic downturn of Rio de Janeiro in last decades is an stylized fact in regional economics in Brazil. People worry if Sao Paulo is attracting jobs that are lost in Rio. In this paper we investigate the economic foundations of this problem. We first derive an analytical framework and hence do some empirical analysis. Using sectorial data we look for whether the relative size of production is related to relative productivity. The results confirm the relation above for almost all sectors. The exceptions are chemistry industry and community services. While in the first case our framework indicates that the production should be more concentrated in Rio, the reverse happens in the second case, which is a sign of larger demand for this non-tradable service.
Note: The Downloadable document is written in Portuguese.
Keywords: Comparative advantages, regional allocation
JEL Classification: R12, R32
Suggested Citation: Suggested Citation