Cities export specialization

ABSTRACT

We analyse whether more populated cities have an export specialization different from the one of less populated cities. Using very detailed product-level export data for Brazilian urban areas over the period 2000–2013, we show that more populated cities export proportionately more skill-intensive and complex goods than less populated cities. This result is consistent with the larger diversity of skills and the higher share of skilled workers in more populated cities.

KEYWORDS:

• Urban areas
• exports
• complexity
• skills
• Brazil
• cities

JEL CLASSIFICATION:

• F11
• F14
• R12

Acknowledgments

This work was supported by the Spanish Ministry of Economy and Competitiveness [grants MINECO ECO2015-68057-R and ECO2016-79650-P], co-financed with The European Regional Development Fund, the Basque Government Department of Education, Language Policy and Culture [grant IT885-16], the Generalitat Valenciana [grant Prometeo II-2014-053] and the Ministry of Education, Culture and Sports, Spain [grant FPU-2010 for pre-doctoral education training].

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Urban area population is obtained from the Census of the Brazilian Statistical Institute and calculated using the arranjos definition.

² Available at http://en.dataviva.info/.

³ Brazilian Ministry of Development, Industry and Foreign Trade assigns exports to a municipality according to the location of the firm’s headquarter. This procedure might overestimate the amount of large cities’ exports. This limitation is also found in other studies that use city-level data (Istrate, Rothwell, and Katz 2010). However, we expect this bias to be similar for low-skill and high-skill products and for low-complexity and high-complexity products.

⁴ The narrow definition of manufacturing industries excludes agricultural and mineral raw materials, food and beverages, wood products, and nonmetallic minerals.

⁵ Available at http://atlas.cid.harvard.edu/rankings/.

⁶ Available at http://www.unctad.info.

⁷ We estimate kernel regressions to obtain these nonparametric relationships.

⁸ Following Costinot (2009), we expect exports to be log-supermodular in population and complexity.

Additional information

Funding

This work was supported by the Spanish Ministry of Economy and Competitiveness [grants MINECO ECO2015-68057-R and ECO2016-79650-P], co-financed with The European Regional Development Fund, the Basque Government Department of Education, Language Policy and Culture [grant IT885-16], the Generalitat Valenciana [grant Prometeo II-2014-053] and the Ministry of Education, Culture and Sports, Spain [grant FPU-2010 for pre-doctoral education training].