Industrial Cores and Peripheries in Brazil

Table 6: Industrial Agglomerations (IVA , lag model)

*significant, 10%; **significant, 5%; ***significant, 1%

The composition of industrial agglomerations in terms of location quotient deserves more detailed
comments, particularly the fact that the prevalence of type B companies (QLB) is not significant in
explaining the emergence of industrial agglomerations. Firstly, the scale advantages that these
companies may achieve are predominantly internal rather than external to the companies. Producers of
intermediate inputs, in particular, do not really need to be present in urban areas and may be sited
relatively isolated from large urban agglomerations, as is the case of integrated steel works. What they
need is to be located near a nodal point of inter-regional exchanges to minimize transportation costs.

Secondly, studies of spatial autocorrelation have shown that there is a correlation between type A
and type B companies. The agglomeration of type A companies seems to attract type B companies, but
the opposite is not true. It is known that type B companies benefit from external savings resulting from
downward linkages between type B suppliers and type A users of industrial inputs. On the other hand,
the fact that the prevalence of type B companies is not a significant variable corroborates the evidence
that the agglomeration of type B companies is not a factor attracting type A companies. And this will
lead to a one-way rather than two-way relationship.

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