Patterns of Industrial Development in Brazil - 1980-95 and Beyond

This is a companion paper to Para onde Vai a Estrutura Industrial Brasileira?, published by the same authors in A Economia Brasileira em Perspectiva - 1998. The long term trend analysis of the Brazilian industrial structure departs from the estimation of development patterns for manufacturing sector industries grouped into eight categories. Following the normal development pattern approach, the model estimates the value added (VA) share of each sector group in total manufacturing VA as a function of: per capita income, labor productivity in the manufacturing sector, country population, degree of industrialization and the GDP share of imports and exports. The sample used for the estimation of development patterns contains data for 80 countries characterized by different development levels in four years from 1980 to 1995, separated at five year intervals. The regression results reveal: a) the existence of stable patterns of industrial development over time; b) that the Brazilian industrial structure displayed a convergence movement towards the estimated normal pattern in most manufacturing industry groups. The few exceptions are analyzed in the text. Given the identified convergence movement, a projection exercise was carried out for the long term (year 2020) in the form of alternative scenarios for per capita income and labor productivity. The results highlight the stability of the industrial structure for the majority of industrial group. The exceptions are analyzed as a function of the different trajectories chosen for the exogenous variables