Dynamics and determinants of export diversification in Brazil from 2003 to 2013

Oliveira, Heder Carlos de; Jegu, Elodie; Santos, Venussia Eliane

doi:10.1590/1982-3533.2020v29n1art02

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Original articles • Econ. soc. 29 (1) • Jan-Apr 2020 • https://doi.org/10.1590/1982-3533.2020v29n1art02 copy

Dynamics and determinants of export diversification in Brazil from 2003 to 2013

Dinâmica e determinantes da diversificação das exportações brasileiras no período de 2003 a 2013

Authorship SCIMAGO INSTITUTIONS RANKINGS

Abstract

Brazil was successful in diversifying its export package from the 1960s to the beginning of the twenty-first century. However, this performance has been more ambiguous over the last decade. This study explores the literature on the impact of export diversification on economic growth and the determinants of successful diversification. More specifically, it analyzes the dynamics of Brazilian export diversification between 2003 and 2013. The results suggest that, overall, exports momentarily concentrated in 2004, 2008 and 2012, but rejoiced from a diversification spike in 2005. Southern and Southeastern states are found to have more diversified exports, but Central-West and Northeastern states have experienced higher diversification rates since 2006. Via a dynamic panel data analysis, using System General Methods of Moments estimation method, including all Brazilian states, past diversification performances, education, patents per capita, credits and public investments are found to be significant determinants of Brazilian export diversification.

Keywords:
Economic growth; Diversification; Dynamic Panel Data; Brazil

Variables	Description	Source

Dependent Variable

Diversification Index	Industry Diversity Index as described in Hausman (2009)HAUSMANN, R.; RODRIK, D. Economic development as self-discovery. Journal of Development Economics, v. 72, n. 2, p. 603-633, 2003.. The index includes the number of unique 6-digit CNAE industries that are present for a given variable.	DataViVa/FAPEMIG

Independent Variables

Lagged Diversification	One year lagged dependent variable.	DataViVa/FAPEMIG
Education	Average Years of Schooling - People who are 25 years old or more.	IPEADATA
Population Density	People per squared km based on our own calculation.	IBGE - Instituto Brasileiro de Geografia e Estatística
Patents per Capita	Yearly patents per capita (units).	Instituto Nacional de Propriedade Industrial
Roads	Percentage of roads in good condition.	Confederação Nacional do Transporte
Agriculture	Share of agricultural land as a percentage of total land.	IBGE
Credit	Credit supply by public and private banks (RS).	Banco Central do Brasil
Public Investment	Public investment (R$).	Controladoria Geral da União

Variable/Method	Dependent Variable: Diversification
Variable/Method	OLS (I)	WG (II)	FD-GMM (III)	SYS-GMM (IV)
Lagged Diversification	0.7673^* ***** estimate significant for p<0.01,	0.2038^* ***** estimate significant for p<0.01,	0.4489^* ***** estimate significant for p<0.01,	0.6296^* ***** estimate significant for p<0.01,
Lagged Diversification	(0.0313)	(0.03937)	(0.0481)	(0.0699)
Education	2.1479^* ***** estimate significant for p<0.01,	13.0318^* ***** estimate significant for p<0.01,	7.3138^* ***** estimate significant for p<0.01,	2.9130^* * p<0.10.
Education	(0.8176)	(1.3328)	(1.6703)	(1.6299)
Population Density	-0.0251^* ***** estimate significant for p<0.01,	0.1389^ significant for p<0.05, significant	0.0602	0.0520
Population Density	(0.0095)	(0.0827)	(0.1628)	(0.1044)
Patents Per Capita	18.7724^* ***** estimate significant for p<0.01,	9.1409	1.0371	23.8798^* ***** estimate significant for p<0.01,
Patents Per Capita	(3.4622)	(8.6551)	(5.0276)	(7.2734)
Roads	0.28121^* ***** estimate significant for p<0.01,	0.3470^* ***** estimate significant for p<0.01,	0.1065	0.1642
Roads	(0.0999)	(0.1119)	(0.0664)	(0.1507)
Agriculture	-0.0317^ significant for p<0.05, significant	-0.5255^* ***** estimate significant for p<0.01,	-0.1002	-0.0067
Agriculture	(0.0143)	(0.1608)	(0.0998)	(0.0818)
Credit	-0.000033	0.0010	0.0018^ significant for p<0.05, significant	0.0019^* * p<0.10.
Credit	(0.0006)	(0.0007)	(0.0009)	(0.0011)
Public Investments	0.1433	0.1327	0.2582^* ***** estimate significant for p<0.01,	0.2189^ significant for p<0.05, significant
Public Investments	(0.1201)	(0.12345)	(0.0595)	(0.0707)
_cons	-3.3747	-23.9632	-13.9102	-7.0800
_cons	(5.0411)	(9.5145)	(8.6598)	(8.3743)
Observations	296	296	243	270
Sargan Test	-	-	0.181	0.176
AR(1)	-	-	0.018	0.018
AR(2)	-	-	0.195	0.121

Instituto de Economia da Universidade Estadual de Campinas, Publicações Rua Pitágoras, 353 - CEP 13083-857, Tel.: +55 19 3521-5708 - Campinas - SP - Brazil
E-mail: publicie@unicamp.br

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