Exports from the Brazilian automotive sector to the southern common market: Trade diversion or cost reduction?

摘要: The automotive sector is one of the sectors in which trade between mercosur countries has grown most strongly. This article examines possibility that diversion occurred during period 1991-2010, assuming product costs fell as a result market expansion. analysis based on concepts “cost reduction” and “trade suppression” coined by Corden (1972), capture effects economies scale. Indices regional orientation revealed comparative advantages are used combination to assess whether bloc evolving line with advantages. results suggest efficiency gains for automotive-sector products, exports from Brazil grew more vigorously because expanded relatively protected made it possible exploit scale characteristic industry.