Trade openness and regional income spillovers in Brazil: A spatial econometric approach

Abstract

This paper employs a spatial Durbin growth model to estimate the impact of trade openness on regional per capita income in Brazil using a data set of 469 Brazilian micro-regions over the period [2004][2005][2006][2007]. We calculate the direct, indirect and cumulative impact on per capita income of trade openness and human capital in these micro-regions. Results indicate that greater trade openness in a region promotes economic development locally, while exerting negative influence on per capita income of the neighbouring regions. Our findings also show that human capital has a positive -direct and indirect -impact on the economic development of Brazilian micro-regions. JEL classification: F1, R11

Physical and Human Capital and Brazilian Regional Growth: A Spatial Econometric Approach for the Period 1970–2010

“…More recently, ÖZYURT and DAUMAL (2013) investigated the influence of international trade and human capital at the level of GDP per capita in Brazilian micro-regions. The results reveal that while openness to the international market is beneficial for a given micro-region, it ultimately has negative effects on neighbouring micro-regions.…”

“…As recently highlighted by ARBIA and PIRAS (2005), LÓPEZ-BAZO (2006), andELHORST et al (2010), in the case of European regions, and REY and MON-TOURI (1999), for US states, the dynamics of growth in geographic units are highly associated with the dynamics of their spatial neighbours, and to estimate correctly the influence of the determinants of growth, this spatial dependence must be explicitly considered in the econometric model. The works of MAGALHÃES et al (2005), SILVEIRA NETO and AZZONI (2006), RESENDE (2011), andÖZYURT andDAUMAL (2013) are among the exceptions that address spatial 2…”

“…These circumstances are the result of its colonial economic history, when export-based activities were based on local natural resources, poor transportation networks among the country's regions and the concentration of industrialization in Brazil's South-east region during the 20th century (CANO, 1985;BAER, 2001). The lack of education investment and the high degree of closure of its economy during most of the 20th century, on the one hand, and agglomeration forces, on the other, have contributed to maintain the historical regional distribution of activities (SILVEIRA NETO and MENEZES, 2008;ÖZYURT and DAUMAL, 2013).…”

The spatial effect of fiscal decentralisation on regional disparities: the case from Indonesia

“…F. Aritenang Agency for the Assessment and Application of Technology email: a.aritenang@gmail.com ing empirical studies and literature on this subject. For example, spatial econometrics analysis with in regional convergence in the US [Rey and Montouri, 1999] and in Turkey [Yildirim et al, 2009], and there are also studies on the spatial effect of trade liberalization such as by Özyurt and Daumal [2013].…”

The Spatial Dimension of Trade- and FDI-Driven Productivity Growth in Chinese Provinces: A Global Cointegration Approach

“…To name only a few, Coughlin and Segev (2000) and Blonigen et al (2007) highlight the importance of agglomeration economies in FDI location decisions respectively in China and in 6 the OECD countries, In the same way, Özyurt and Daumal (2011) find strong spatial spillovers arising from export performances of micro-regions in Brazil. Keller and Shuie (2007) investigate the expansion of inter-regional trade networks in China trough spatial explanatory data analysis and detect significant spatial interactions among provinces.…”