Brazil's Comparative Advantages and Specialization Dynamics in Agri-food Trade

Ivo ZdráhalMartin HrabálekPetr KadlecOldřich Krpec

DOI 10.7160/aol.2021.130210
No 2/2021, June
pp. 121-139

Zdráhal, I., Hrabálek, M., Kadlec, P. and Krpec, O. (2021) "Brazil's Comparative Advantages and Specialization Dynamics in Agri-food Trade", AGRIS on-line Papers in Economics and Informatics, Vol. 13, No. 2, pp. 121-139. ISSN 1804-1930. DOI 10.7160/aol.2021.130210.

Abstract

In the last decades Brazil has become a global agri-food powerhouse. The article interrogates the shape and its stability of revealed comparative advantages in 46 of its agri-food products for the period 1995-2017. The results support the argument that the Brazil's agri-food trade was formed by comparative advantages of specific agri-food sectors. The results show that the external shape of agri-food specialization has strengthened, first since early 2000s and second when the trade shifted more towards China. The pattern was stable according revealed comparative (dis)advantage of particular products, more changes occurred in each product's score and in ranking of products. Products without initial comparative advantage seem to remain uncompetitive whilst the products with strong initial comparative advantage continue to be competitive. The persistence in distribution has increased. This suggests, the shape of Brazil's revealed comparative advantage in agri-food trade has evolved towards its finite structure (ceteris paribus).

Keywords

European Union, Liberalization, Markov Chain Model, MERCOSUR, Specialization.

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