Regulation and behavior of firms in Brazil's natural rubber agro-industrial system between 1997-2000
The need for regulation of Brazils natural rubber agro-industrial system (SAG) is evident. Since the middle of the 20th century, when the country began importing rubber, many governmental efforts have been made to promote the sustainable development of Brazils natural rubber productive sector. In 1997, the Brazilian government created a direct subvention policy to assist rubber producers. Given the structure of Brazils SAG, the international rubber market, and imperfect regulation by the Federal Government, it would not be unexpected to find signs that Brazils largest natural rubber consumer, the domestic tire industry, has begun to abusively exercise its market power. Using the theoretical structure of Industrial Organization, this paper tries to show evidences of this abuse.