The external orientation of the Brazilian manufacturing industry after trade liberalization

ABSTRACT

In this article we built external orientation indicators for the Brazilian manufacturing industry. These indicators allow us to better understand the changes on trade orientation during the 1990s and the effect of an external shock, considering both the revenue (external sales and domestic competition with imports) and the cost (imported inputs) channels. The study shows that the net external orientation coefficient for the manufacturing sector as a whole dropped by 11.3% between 1989 and 1998, diminishing the positive effect that currency devaluation would have on the manufacturing sector.

KEYWORDS:
Commercial integration; exports; liberalization; external orientation indicators