Brazilian exporters and the rise of Global Value Chains: an empirical assessment

This paper studies how production fragmentation has affected the performance of Brazilian exporters in the manufacturing sector. We begin by combining existing classifications of internationally traded products to identify four different categories of goods, of which one ('customised intermediates') we associate more closely with fragmented trade. We then proceed to compare the productivity premium of international traders for these different categories. Our results confirm exporting customised intermediates is associated with a superior performance in comparison to other intermediates; but also highlights a strong influence of sector specificities. We also investigate the existence of learning-by-exporting effects and find no evidence for firms that produce customised intermediates exclusively. However, exports of customised products in general - i.e. both final and intermediate goods - are associated with learning. This result suggests trade in customised intermediates might be associated with learning when firms manage to upgrade their products to other customised goods.

JEL Classification: F14, F12, O33, O31

Keywords: exports, productivity, fragmentation, Global Value Chains