An Evaluation of Mercosur's Regional Impacts Using Panel Data

In this paper we assess the impacts of the Mercosul preferential trade agreement on Brazil's regional trade flows by means of a gravity model, extended to include dummy variables for Mercosul and for a Brazilian region. Using panel data, we implement the model in three different ways: a pooled cross section model, a fixed effects model and a first differences model. As in previous work by these authors, which were carried out using cross section data, our results show that the most significant regional impacts of Mercosul were on Brazil's Southern and Southeastern regions, whereas the North, Northeast and Center-West regions had much smaller impacts in the period from 1990 to 2000. This shows that these results regarding the regional impacts of Mercosul are robust, and are independent of the data structure or the type of model used