Brazilian Exports : Climbing Down a Competitiveness Cliff

This note examines in detail Brazil s export performance over the past 15 years, focusing not only on growth and composition, but also on different performance dimensions, including diversification, sophistication, and firm dynamics. The analysis uses international comparisons to better situate the Brazilian performance, and explores different databases, including firm-level data recently published by the World Bank. The note uses a recent diagnostic toolkit developed by the World Bank in order to suggest some hypotheses about the factors that have been inhibiting exports and industrial production expansion. Among the latter, it is noted how service sectors, as the largest beneficiaries from favorable terms of trade, accommodated larger wage increases and "exported" cost pressures to other sectors of the economy. Furthermore, although a stronger currency can be appointed as one of the elements behind the lower competitiveness in Brazilian exports, sluggish productivity performance and a real wage uptrend explain a significant part of the overall loss of competitiveness. This diagnostic reinforces the importance of resuming the agenda of microeconomic reforms, increasing the investment-to-gross domestic product ratio, and advancing toward better-skilled human capital.

Bibliographic Details

Main Authors:	Canuto, Otaviano, Cavallari, Matheus, Guilherme Reis, José
Language:	en_US
Published:	World Bank, Washington, D.C. 2013-01
Subjects:	aggregate demand, annual growth, bilateral trade, Business environment, Central Bank, commodities, commodity, commodity exporters, commodity prices, comparative advantage, comparative advantages, comparative analysis, Competitiveness, consumer prices, consumers, country of destination, country of origin, currency, customs, demographic, dependent variable, developed countries, developing countries, development policy, Diversification of exports, domestic consumption, domestic demand, domestic markets, economic crisis, economic development, economic dynamism, economic environment, economic growth, Economic Policy, Economic Research, economic sectors, economies of scale, emerging market, exchange rate appreciation, Exchange rates, export basket, export baskets, export competitiveness, export diversification, Export Dynamics, export growth, Export market, Export market share, export markets, export performance, export performances, export sector, export sectors, export share, exporter, Exports, External Balance, external shock, financial crisis, fixed costs, fixed effects, Foreign competition, foreign sales, foreign trade, full employment, GDP, GDP deflator, GDP per capita, global economy, global integration, global markets, globalization, gravity equation, gravity model, gross domestic product, growth rate, Growth rates, growth volatility, human capital, Impact of Trade, import, import penetration, imports, income growth, industrial production, industrial sector, Industrialization, intermediate inputs, international competition, international competitiveness, international market, International Trade, Job Creation, knowledge spillovers, loss of competitiveness, market share, market shares, middle-income economies, natural capital, natural resources, new markets, nominal wages, oil exports, Open Economy, per capita income, Poverty Reduction, productivity, real effective exchange rate, real exchange rate, slowdown, specialization, sunk costs, supply side, supply-side, tax, tax system, terms of trade, total exports, total factor productivity, Tourism, trade competitiveness, trade flows, trade impact, trade integration, trade logistics, Trade openness, trade relationships, trades, trading partner, trading partners, Trading Volumes, vertical specialization, wages, Wealth, World Development Indicators, world economy, world market, world market share, world trade,
Online Access:	http://hdl.handle.net/10986/16330
Tags:	Add Tag No Tags, Be the first to tag this record!