Trade Liberalization and Industrial Concentration: Evidence from Brazil

26 Pages Posted: 18 Mar 2004

See all articles by Pedro C. Ferreira

Pedro C. Ferreira

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

Giovanni Facchini

Tinbergen Institute

Date Written: March 10, 2004

Abstract

This paper applies an endogenous lobby formation model to explain the extent of trade protection granted to Brazilian manufacturing industries during the 1988-1994 trade liberalization episode. Using a panel data set covering this period, we find that even in an environment in which a major regime shift has been introduced, more concentrated sectors have been able to obtain policy advantages, that lead to a reduction in international competition. The importance of industry structure appears to be substantial: In our baseline specification, an increase in concentration by 20% leads to an increase in protection by 5%-7%.

Keywords: Lobby formation, tariffs, Brazil

JEL Classification: F13

Suggested Citation

Cavalcanti Ferreira, Pedro and Facchini, Giovanni, Trade Liberalization and Industrial Concentration: Evidence from Brazil (March 10, 2004). Available at SSRN: https://ssrn.com/abstract=517762 or http://dx.doi.org/10.2139/ssrn.517762

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)

Giovanni Facchini

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

HOME PAGE: http://paople.few.eur.nl/facchini

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