Skill-based functional specialization in trade: an input–output analysis of multiscalar value chains in Brazil

Sophisticated spatial labour markets can promote better opportunities for functional upgrading in value-added trade. This paper estimates the skill-based specialization Brazilian factor content trade (LTiVA), considering different geographical scales. We combined an interregional input–output model states with occupational data to identify skill intensity embedded LTiVA based on hypothetical extraction method (HEM) technique. Our findings show that largest Southeastern economic area specializes highly sophisticated functions, while rest of country embodies low skills domestic and global levels. Furthermore, results reveal a central role São Paulo state governing subnational value chains reinforcing international uneven division pattern at level.