How International integration affects the exports of Brazilian States

This paper assesses the impacts of international integration on the export
flows of Brazilian states. We use a gravity model with dummy variables for
the main partner blocs and for each pair Brazilian region-partner country, to
account for the specificities of particular trade relations. Variables capturing
regional openness and competitiveness are also included. We estimate a
pooled cross-section model, with data for 2 countries, 27 states, and
years. After controlling for size and distance, trade with Mercosur and the EU is more
intense than with the rest of the world. States accounting for larger shares
of interregional trade tend to trade less internationally, while the opposite
holds for those that are more competitive. The results also indicate that
sectoral specificities play a role in explaining state’s exports, as in the case of
Paulo C . de Sá Porto
Carlos Roberto Azzoni
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