Asymmetric internationalization and subordination: global productive fluctuations affecting industrial investment in Brazil (2000–2019)

Vinícius Martinez and André Biancarelli

Journal of Post Keynesian Economics, 2025, vol. 48, issue 4, 633-659

Abstract: This article analyses the subordination of the Brazil’s productive structure to global productive fluctuations (GPF) as a consequence of the asymmetric internationalization and denationalization of domestic economic activities in the 21st century. Specifically, we investigate the effects of global production fluctuations on Brazilian industrial investment – a key driver of development – over the period from 2000 to 2019. The findings provide evidence of intense asymmetric internationalization of Brazil’s productive structure, driven by high and growing levels of foreign direct investment (FDI), particularly through mergers and acquisitions (M&A). Econometric analyses grounded in post-Keynesian and structuralist macroeconomics yield two key conclusions: (i) Brazilian industrial investment exhibited cointegrated behavior with global production variations during the period, responding in a subordinated manner to global productive fluctuations; (ii) FDI and domestic industrial investment exhibited a synchronized movement, suggesting that FDI serves as a significant channel through which global production fluctuations constrain the autonomy of domestic economic policy. These results align with the recent literature on international financial subordination and dependency, highlighting the persistent challenges faced by peripheral economies in mitigating external vulnerabilities.

Date: 2025
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DOI: 10.1080/01603477.2025.2503150

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