%0 Journal Article %T The impact of international trade flows on economic growth in Brazilian states %A Marie Daumal %A Selin £¿zyurt %J Review of Economics and Institutions %D 2011 %I University of Perugia %R 10.5202/rei.v2i1.27 %X This paper explores the impact of trade openness on the economic growth of Brazilian states according to their initial income level. This empiri- cal study covers 26 Brazilian states over the period 1989-2002. Growth rates of Brazilian states are modeled as dependent on international trade flows and a set of control variables such as initial income level, human capital, private and public physical capital, growth rate of labor force and a number of inter- action terms with trade openness. This empirical analysis relies on dynamic growth regressions, using the system GMM estimator. The results indicate that trade openness is more beneficial to states with a high level of initial per capita income and therefore contributes to increased regional dispari- ties in Brazil. In addition, trade openness favors more industrialized states, well-endowed in human capital, rather than states whose economic activity is mainly based on agriculture and farming. These results have important policy implications since achieving balanced territorial development has be- come a priority for the Brazilian federal government over the last few decades. %K international trade %K growth equation %K GMM estimator %K Brazilian states %U http://www.rei.unipg.it/rei/article/view/27