Linking Brazilian Regions to Value Chains: Is There a Potential for Regional Development?

Abstract

This paper examines the subnational dimension of regional value-added transfers in multiscalar value chains in Brazil by analyzing the local content embedded in trade. This study reveals distinct spatial-based connectivity patterns within subnational and global value chains. An input–output model is employed to estimate the trade in value added from different Brazilian regions. The findings demonstrate that economically advanced regions, such as Southeastern Brazil, are both globally and nationally integrated and therefore stand to benefit from both types of integration. Conversely, subnational peripheries in the North and Northeastern states of Brazil play a crucial role in supplying raw materials for both domestic and global flows. These regions exhibit a clear profile of export dependency with low value-added content in trade. Consequently, our trade measures highlight a spatial concentration of development opportunities characterized by a distinct core–periphery pattern within the country. This imbalance in territorial capacity limits the potential for these regions to derive economic development benefits from integration into value chains.

Keywords

• trade in value-added (TiVA)
• domestic value chains (DVC)
• global value chains (GVC)
• multiscalar analysis
• uneven development