The potential impact of products seized on the western border of Paraná on the Brazilian economy

Abstract

This paper analyzes the illegal trade practices carried out in the Paraná western border region and its impacts on each federative unit (FU) regarding gross output (GO), taxes, labor income, and employment. An interregional input–output system was used for this analysis. The results show that the negative impact on the national economy, if the police/Federal Revenue had not seized any product, would be twice as large as the amount seized, exceeding one billion reais in the 2017 national GO. Thus, considering the volume seized, cigarettes would have been the product that would harm the Brazilian economy most if the seizures had not occurred, and the state most negatively impacted would be Rio Grande do Sul. However, in terms of production, taxes, and income multipliers, the most harmful products for the Brazilian economy would have been electronic and computer products, and the FU most impacted by the entry of these products would have been São Paulo.