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Economics Research International
Volume 2012 (2012), Article ID 364715, 10 pages
http://dx.doi.org/10.1155/2012/364715
Research Article

Nonlinearity of the Relationship between Human Capital and Exportation in Brazil

1Department of Economics, State University of Maringa, Avenida Colombo, 5.790-UEM, 87020-900 Maringa, PR, Brazil
2“Luiz de Queiroz” College of Agriculture, University of Sao Paulo, Avenida Padua Dias 11, 13418-900 Piracicaba, SP, Brazil

Received 12 June 2012; Accepted 8 August 2012

Academic Editor: Almas Heshmati

Copyright © 2012 Gilberto Joaquim Fraga and Carlos José Caetano Bacha. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

For Brazil to realize the economic benefits of competitive advantage, it is critically important that the country's policy makers have an awareness of the determinants of Brazilian exports. Our study aims to evaluate the role of human capital measured by the average years of workforce formal education, in the value of exports from each Brazilian state from 1995 through 2006, highlighting differences among the states and/or regions. Based on the Dixit and Woodland (1982) model, our empirical analysis is implemented by running a regression of data organized into a panel that takes into account the fixed effects (i.e., the amenities) found in each of the 27 Brazilian states (including the Federal District). Our findings are consistent with the selected theoretical model and indicate that human capital in Brazil has a nonlinear effect on exportation with an inflection point of 6.7 years of formal education.