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Revista de Economia Contemporânea

On-line version ISSN 1980-5527


LEUSIN JR., Sérgio  and  AZEVEDO, André Filipe Zago de. The border effect in Brazilian regions: a gravity model approach. Rev. econ. contemp. [online]. 2009, vol.13, n.2, pp.229-258. ISSN 1980-5527.

This paper analyzes the border effect for Brazilian goods market and its regions in 1999. This effect was quantified empirically by using cross-sectional data in a gravitational model for twenty-six Brazilian states plus the Federal District and forty other countries. Despite Brazil's involvement in commercial opening in the 90's, as well as important regional trade agreements such as Mercosul, we noticed that Brazil and some of its regions have high cross-border costs. The finding results of this equation suggest a trade 33 times higher between Brazilian states than the international trade of these states. Regarding each Brazilian region, the border effect found for intra-national trade among Northeast and North regions is significantly higher than the border effect for Southeast and Southern regions.

Keywords : interregional trade; border effect; gravity model; regional integration.

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