The textile industry in Brazil: an econometric model analyzing the deindustrialization hypothesis

Abstract In the last few years, a possible process of deindustrialization is observed in Brazil. For some researchers, such as the new developmentalists, this scenario is already evident; but for others, such as orthodox economists, it is not possible to diagnose the existence of this process in Brazil. By analyzing the present Brazilian scenario with a slowdown in the economy and reduced purchasing power of families, it is possible to ascertain a deep downturn in the weight of the manufacturing industry in the GDP. This process differs from the one that has occurred in advanced economies, which was healthy and steady. In Brazil, the deindustrialization process can be analyzed from the perspective of the textile industry, especially with market openness to Chinese products. Thus, this work will aim to present, using the Vector Error Correction Model (VECM), the relationship between the deindustrialization processes of the textile industry in Brazil from 1995 to 2015, using Brazilian macroeconomic variables.