Sectoral deindustrialization and long-run stagnation of Brazilian manufacturing

Abstract

ABSTRACT In Brazil and elsewhere in the world, diagnoses of deindustrialization are concentrated in aggregate manufacturing, so policies can be ineffective if deindustrialization has a sector-specific component. This study quantifies and analyses deindustrialization for the individualised manufacturing sub-sectors. To do this, unpublished series of the manufacturing sub-sectors’ share in the Brazilian GDP from 1970 to 2016 were created, based on official IBGE data. The results show that the manufacturing sub-sectors have deindustrialised at different intensities and periods of aggregate manufacturing, and a sub-sectoral approach reveals traces ignored by the literature on the quality of deindustrialization. We conclude that the Brazilian deindustrialization is normal (and expected) for the labour-intensive manufacturing sub-sectors, but premature (and undesirable) for the technology-intensive sub-sectors. Therefore, Brazilian deindustrialization has negative consequences for the country’s future scientific and technological development.

Keywords

• Sectoral deindustrialization
• industrial development
• sectoral heterogeneity
• structural change