View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Research Papers in Economics Inter-American Development Bank Banco Interamericano de Desarrollo Latin American Research Network Red de Centros de Investigación Research Network Working Paper #R-550 The Emergence of New and Successful Export Activities in Brazil: Four Case Studies from the Manufacturing and the Agricultural Sector By Angela da Rocha* Alexandre Darzé* Beatriz Kury* Joana Monteiro** *COPPEAD/UFRJ **DAI, Brazil September 2008 Cataloging-in-Publication data provided by the Inter-American Development Bank Felipe Herrera Library The emergence of new and successful export activities in Brazil : four case studies from the manufacturing and the agricultural sector / by Angela da Rocha … [et al.]. p. cm. (Research Network Working Papers ; R-550) Includes bibliographical references. 1. Exports--Brazil. 2. Brazil—Commercial policy. 3. Agricultural industries—Brazil— Exports—Case studies. 4. Manufacturing industries—Brazil—Exports—Case studies. I. Rocha, Angela da. II. Inter-American Development Bank. Research Dept. III. Latin American Research Network. IV. Series. HF3406.5 .E265 2008 332.45 E265-----dc22 ©2008 Inter-American Development Bank 1300 New York Avenue, N.W. Washington, DC 20577 The views and interpretations in this document are those of the authors and should not be attributed to the Inter-American Development Bank, or to any individual acting on its behalf. This paper may be freely reproduced provided credit is given to the Research Department, Inter- American Development Bank. The Research Department (RES) produces a quarterly newsletter, IDEA (Ideas for Development in the Americas), as well as working papers and books on diverse economic issues. To obtain a complete list of RES publications, and read or download them please visit our web site at: http://www.iadb.org/res. 2 Table of Contents Introduction................................................................................................................................. 10 1. Theoretical Framework......................................................................................................... 10 2. Overview of Brazil’s Export Performance ........................................................................... 12 3. Methodology......................................................................................................................... 16 3.1. Case Selection................................................................................................................ 16 3.2. Data Collection and Analysis ........................................................................................ 20 CASE 1 – THE BRAZILIAN FURNITURE INDUSTRY .......................................................................... 22 1. General Description ............................................................................................................. 22 1.1. The Brazilian Furniture Industry................................................................................... 22 1.2. The São Bento do Sul Furniture Cluster........................................................................ 26 2. The Discovery And The Diffusion Process: Historical Overview........................................ 28 2.1. Zipperer, the first mover ................................................................................................ 29 2.2. Artefama, the immediate follower.................................................................................. 32 2.3. The Diffusion Process.................................................................................................... 36 2.4. Present Hardships.......................................................................................................... 41 3. Role of Support Institutions.................................................................................................. 42 3.1. Abimóvel, the Furniture Industry Association............................................................... 42 3.2 Sindusmobil, the São Bento do Sul Industry Association ............................................... 44 3.3. FETEP, the Local Training and Research Center......................................................... 45 3.4. UDESC, the State University ......................................................................................... 45 3.5. The Brazilian Government............................................................................................. 45 4. Counterfactual Analysis........................................................................................................ 46 3 4.1 Exports of Non-Wood Furniture ..................................................................................... 47 4.2. Rudnick – a different São Bento do Sul exporter........................................................... 48 4.3. Flexiv, a successful producer that failed to export........................................................ 49 4.4. A Comparison of Rudnick’s and Flexiv’s Experiences.................................................. 50 5. Synthesis of the Discovery and Diffusion Process in the São Bento do Sul Cluster............ 51 6. Case Study Analysis and Conclusions.................................................................................. 54 6.1. The Nature of the Discovery .......................................................................................... 54 6.2. First Mover Characteristics........................................................................................... 54 6.3. First Mover’s Motives and External Stimuli.................................................................. 55 6.4. Difficulties Faced by the First Mover............................................................................ 56 6.5. Entry in the First Foreign Market and Subsequent Markets ......................................... 56 6.6. Impact of Diffusion on the First Mover ......................................................................... 57 6.7. Characteristics of Imitating Firms................................................................................. 57 6.8. Strategies Followed by Imitating Firms ........................................................................ 58 6.9. External Events Influencing Discoveries and Diffusion ................................................ 58 6.10. Coordination Issues and Spillovers ............................................................................. 59 6.11. Role of Private and Public Support Institutions .......................................................... 60 CASE 2 – THE SWIMWEAR INDUSTRY............................................................................................. 61 1. General Description .............................................................................................................. 61 1.2. The Rio de Janeiro and the São Paulo Beachwear Clusters ......................................... 65 2. The Discovery and the Diffusion Process: Historical Overview.......................................... 65 2.1. Blue Man, the first mover............................................................................................... 66 2.2. Bumbum, an independent second-mover ....................................................................... 68 2.3. The Diffusion Process.................................................................................................... 70 3. Role of Support Institutions.................................................................................................. 85 4 3.1. ABEST, The Association of Fashion Designers............................................................. 85 3.2. The Brazilian Government............................................................................................. 85 4. Counterfactual Analysis........................................................................................................ 87 5. Synthesis of the Discovery and Diffusion Process in the Brazilian Swimwear Industry ..... 90 6. Case Study Analysis and Conclusions.................................................................................. 95 6.1. The Nature of the Discovery .......................................................................................... 96 6.2. Was There a First Mover? ............................................................................................. 96 6.3. Influence of the First Mover and the Second Mover on the Diffusion Process ............. 97 6.4. First Mover and Second Mover Characteristics............................................................ 98 6.5. First Mover and Second Mover Motives and External Stimuli...................................... 98 6.6. Difficulties Faced by the First Mover and the Second Mover....................................... 98 6.7. Impact of Diffusion on the First Mover and the Second Mover .................................... 99 6.8. Characteristics of Later Entrants in Exporting ............................................................. 99 6.9. Strategies Followed by Later Entrants .......................................................................... 99 6.10. External Events Influencing Discoveries and Diffusion ............................................ 100 6.11. Coordination Issues and Spillovers ........................................................................... 101 6.12. Role of Private and Public Support Institutions .......................................................