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

Guilhoto, Joaquim José Martins and Siroën, Jean-Marc and Yucer, Ayçil (2013): Internal and International Vertical Specialization– Estimations For Brazil and new Approach to Gravity Models.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Vertical Specialization, Input-Output Analysis, Gravity Model, Brazil, intra-national trade
• Subjects: F - International Economics > F0 - General > F02 - International Economic Order and Integration; F - International Economics > F1 - Trade > F15 - Economic Integration; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R15 - Econometric and Input-Output Models ; Other Models

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