Potential market and regional inequality in Brazil: a study applied to industrial producing municipalities in 2010

Abstract

The article analyzes impacts on the spatial distribution of nominal wages using an expanded NGE equation. A potential market function was specified, in which transport costs are measured by the average travel time between the main industrial producing municipalities in Brazil in 2010. It was observed that accessibility to regional markets directly contributed to the growth of wages practiced by Traditional industries (S1) and Manufacturers of capital and durable goods (S4); in the sectors of Mineral commodities (S2) and Chemicals, energy and fuels (S3), however, such income depends on the value of local exports. Job qualification is an important source of increasing returns, but technology-intensive sectors with greater access to regional markets (S4) benefit most from the extent of spatial spillovers.