New Evidence from Brazil on Trade Liberalization and Productivity Growth

23 Pages Posted: 9 Oct 2003

See all articles by Pedro C. Ferreira

Pedro C. Ferreira

Graduate School of Economics at Fundacao Getulio Vargas (EPGE/FGV)

José Luiz Rossi Júnior

Institute of Applied Economic Research (IPEA) - Directory of Macroeconomic Policy & Studies (DIMAC)

Abstract

This article presents evidence on the positive effect of international trade on productivity growth using industrial level data preceding and following Brazil's trade liberalization in 1988-90. Our data reveal large and widespread productivity improvement across industries after barriers to trade were drastically reduced. Econometric results confirm the association between trade liberalization and productivity growth and show that the impact was indeed substantial: The observed tariff reduction in the period brought a 6% estimated increase in total factor productivity growth rate and a similar impact on labor productivity.

Suggested Citation

Cavalcanti Ferreira, Pedro and Rossi Júnior, José Luiz, New Evidence from Brazil on Trade Liberalization and Productivity Growth. Available at SSRN: https://ssrn.com/abstract=452788

Pedro Cavalcanti Ferreira (Contact Author)

Graduate School of Economics at Fundacao Getulio Vargas (EPGE/FGV) ( email )

Praia de Botafogo 190/1125, CEP
Rio de Janeiro RJ 22253-900
Brazil
+55 21 559 5840 (Phone)
+55 21 553 8821 (Fax)

José Luiz Rossi Júnior

Institute of Applied Economic Research (IPEA) - Directory of Macroeconomic Policy & Studies (DIMAC) ( email )

Av. Presidente Antonio Carlos 51
10 Andar Centro
Rio de Janeiro RJ 20020-010
Brazil

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