The impact of MERCOSUR on trade of Brazilian states

Jean Siroen and Ayçıl Yücer

Review of World Economics (Weltwirtschaftliches Archiv), 2012, vol. 148, issue 3, 553-582

Abstract: We consider the impact of MERCOSUR on trade among Brazilian states and on trade by Brazilian states with MERCOSUR and the rest of the world. We use a theoretically founded gravity model to shed light on MERCOSUR’s possible creation and diversion effects as well as its “preference erosion” effect on trade among Brazilian states. Using data on interstate trade over a 4-year period, including 1 year prior to the MERCOSUR period (1991), we deliver empirical evidence at state level with a focus on the impact of MERCOSUR which can vary across Brazilian regions. We show that MERCOSUR increased Brazilian states’ trade with member countries, but had no effect on either interstate trade or Brazilian states’ trade with third countries. The paper finds that MERCOSUR’s impact varies across Brazilian regions and that Center West region did not benefit from the integration to MERCOSUR. We use an estimation method dealing better with the traditional issue of zero trade values and heteroskedasticity than ordinary least squares does. Copyright Kiel Institute 2012

Keywords: Regional trade agreements; MERCOSUR; Gravity model; Trade diversion; Trade creation; Preference erosion; F140; F150; R100; R500 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1007/s10290-012-0127-0 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The Impact of MERCOSUR on Trade of Brazilian States (2012)
Working Paper: The Impact of MERCOSUR on Trade of Brazilian States (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:weltar:v:148:y:2012:i:3:p:553-582

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10290/PS2

DOI: 10.1007/s10290-012-0127-0

Access Statistics for this article

Review of World Economics (Weltwirtschaftliches Archiv) is currently edited by Paul Bergin, Holger Görg, Cédric Tille and Gerald Willmann

More articles in Review of World Economics (Weltwirtschaftliches Archiv) from Springer, Institut für Weltwirtschaft (Kiel Institute for the World Economy) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().