Exports from the Brazilian automotive sector to the Southern Common Market: Trade diversion or cost reduction?

The automotive sector is one of the sectors in which trade between mercosur countries has grown most strongly. This article examines the possibility that trade diversion occurred in that sector during the period 1991-2010, assuming that product costs fell as a result of market expansion. The analysis is based on the concepts of “cost reduction” and “trade suppression” coined by Corden (1972), which capture the effects of economies of scale. Indices of regional orientation and revealed comparative advantages are used in combination to assess whether the trade bloc is evolving in line with comparative advantages. The results suggest efficiency gains for automotive-sector products, exports of which from Brazil to mercosur grew more vigorously because the expanded and relatively protected market made it possible to exploit the economies of scale that are characteristic of the automotive industry.

CEPAL Review no. 115

Stylized features of the investment-growth connection in Latin America, 1980-2012 / Sandra Manuelito and Luis Felipe Jiménez.--International technological dynamics in production sectors: An empirical analysis / Fernando Isabella Revetria.-- Does public financial support stimulate innovation and productivity? An impact evaluation / Diego Aboal and Paula Garda.-- Digital inclusion in education in Tarija, Plurinational State of Bolivia / Sulma Farfán Sossa, Antonio Medina Rivilla and María Luz Cacheiro González.-- Macroeconomic trade-offs and external vulnerabilities of human development in Nicaragua / Marco V. Sánchez Cantillo.-- Classroom discipline, classroom environment and student performance in Chile / Carolina Gazmuri, Jorge Manzi and Ricardo D. Paredes.-- Pricing and spread components at the Lima Stock Exchange / Luis Chávez-Bedoya, Carlos Loaiza Álamo and Giannio Téllez De Vettori.-- Exports from the Brazilian automotive sector to the Southern Common Market: Trade diversion or cost reduction? / André Filipe Zago de Azevedo and Angélica Massuquetti.--Determinants of unfair inequality in Brazil, 1995 and 2009 / Ana Claudia Annegues, Erik Alencar de Figueiredo and Wallace Patrick Santos de Farias Souza.-- A comparative analysis of productivity in Brazilian and Mexican manufacturing industries / Armênio de Souza Rangel and Fernando Garcia de Freitas.

Global integration, disarticulation and competitiveness in Mexico’s electromechanical sector: A structural analysis

This article analyses the dual functioning of the Mexican electromechanical sector between 1994 and 2008, as distinct from other globalized activities. An estimation of labour productivity in 52 industrial classes finds that structural heterogeneity increased particularly in the 1994-2001 subperiod, alongside technical and organizational improvements that were increasingly concentrated in a small number of subsidiary companies of transnational automotive-assembly enterprises. The application of a shift-share technique also revealed the absence of any significant structural change. Lastly, an extension of the methodology to evaluate competitiveness —developed by the Economic Commission for Latin America and the Caribbean (eclac)— and its application to a second database that reclassifies 1,345 foreign trade products, makes it possible to contrast these changes with the dynamism of the global production networks in which the leading firms of the sector in Mexico are engaged.

Industrial location and sectoral linkages: the case of the Brazilian automotive industry

The aim of this article is to analyse the spatial distribution of the automotive industry in Brazil in terms of its various economic categories between 1995 and 2011, and to shed light on its sectoral linkages through inter-regional input-output matrices. By calculating the coefficient of localization (QLij) for that period, it was found that the third wave of investments, which began in the second half of the 1990s, actually caused a slight spatial deconcentration of this sector in the national economy. The coefficient of geographic association (CAik)calculated for different years revealed a slight reduction, while maintaining a high level of concentration, which suggests that vehicle production is closely integrated with other economic activities. This integration was corroborated particularly in terms of input purchases (backward linkages) in all of the analysed regions.