Trade and Regional Inequality
AbstractThis paper examines the relationship between openness and within-country regional inequality across 28 countries over the period 1975-2005, paying special attention to whether increases in global trade affect the developed and developing world differently. Using a combination of static and dynamic panel data analysis, it is found that while increases in trade per se do not lead to greater territorial polarisation, in combination with certain country-specific conditions, trade has a positive and significant association with regional inequality. In particular, states with higher interregional differences in sectoral endowments, a lower share of government expenditure, and a combination of high internal transaction costs with a higher degree of coincidence between the regional income distribution and regional foreign market access positions have experienced the greatest rise in territorial inequality when exposed to greater trade flows. This means that changes in trade regimes have had a more polarising effect in low and middle income countries, whose structural features tend to potentiate the trade effect and whose levels of internal spatial inequality are, on average, significantly higher than in high income countries.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Clark University in its journal Economic Geography.
Volume (Year): 88 (2012)
Issue (Month): 2 (04)
Contact details of provider:
Postal: Worcester, MA 01610-1477
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0013-0095
More information through EDIRC
Other versions of this item:
- Andrés Rodríguez-Pose, 2010. "Trade and regional inequality," Working Papers 2010-13, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
- Rodríguez-Pose, Andrés, 2011. "Trade and regional inequality," CEPR Discussion Papers 8616, C.E.P.R. Discussion Papers.
- Rodriguez-Pose, Andres, 2010. "Trade and regional inequality," Policy Research Working Paper Series 5347, The World Bank.
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Tianlun Jian & Jeffrey D. Sachs & Andrew M. Warner, 1996. "Trends in Regional Inequality in China," NBER Working Papers 5412, National Bureau of Economic Research, Inc.
- Thomas Farole & Andrés Rodríguez-Pose & Michael Storper, 2010.
"Cohesion policy in the European Union: Growth, geography, institutions,"
2010-14, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
- Thomas Farole & Andrés Rodríguez‐Pose & Michael Storper, 2011. "Cohesion Policy in the European Union: Growth, Geography, Institutions," Journal of Common Market Studies, Wiley Blackwell, vol. 49(5), pages 1089-1111, 09.
- Kanbur, Ravi & Zhang, Xiaobo, 2004.
"Fifty Years of Regional Inequality in China: A Journey through Central Planning, Reform, and Openness,"
Working Paper Series
UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Ravi Kanbur & Xiaobo Zhang, 2005. "Fifty Years of Regional Inequality in China: a Journey Through Central Planning, Reform, and Openness," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 87-106, 02.
- Ravi Kanbur & Xiaobo Zhang, 2004. "Fifty Years of Regional Inequality in China: A Journey Through Central Planning, Reform and Openness," Working Papers 158, Institute for Social and Economic Change, Bangalore.
- Raul Livas Elizondo & Paul Krugman, 1992.
"Trade Policy and the Third World Metropolis,"
NBER Working Papers
4238, National Bureau of Economic Research, Inc.
- Marius BRÜLHART & Matthieu CROZET & Pamina KOENIG, 2004.
"Enlargement and the EU Periphery: The Impact of Changing Market Potential,"
Cahiers de Recherches Economiques du DÃ©partement d'EconomÃ©trie et d'Economie politique (DEEP)
04.02, Université de Lausanne, Faculté des HEC, DEEP.
- Marius Brülhart & Matthieu Crozet & Pamina Koenig, 2004. "Enlargement and the EU Periphery: The Impact of Changing Market Potential," The World Economy, Wiley Blackwell, vol. 27(6), pages 853-875, 06.
- Crozet, Matthieu & Brülhart, Marius & Koenig, Pamina, 2004. "Enlargement and the EU Periphery : The Impact of Changing Market Potential," HWWA Discussion Papers 270, Hamburg Institute of International Economics (HWWA).
- Diego Puga, 1996.
"The Rise and Fall of Regional Inequalities,"
CEP Discussion Papers
dp0314, Centre for Economic Performance, LSE.
- Paluzie i Hernandez, Elisenda, 1999.
"Trade policy and regional inequalities,"
ERSA conference papers
ersa99pa231, European Regional Science Association.
- Alberto F. Ades & Edward L. Glaeser, 1994.
"Trade and Circuses: Explaining Urban Giants,"
NBER Working Papers
4715, National Bureau of Economic Research, Inc.
- Glaeser, E.L. & Ades, A.F., 1993. "Trade and Circuses: Explaining Urban Giants," Harvard Institute of Economic Research Working Papers 1646, Harvard - Institute of Economic Research.
- Richard Blundell & Steve Bond, 1995.
"Initial conditions and moment restrictions in dynamic panel data models,"
IFS Working Papers
W95/17, Institute for Fiscal Studies.
- Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
- R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
- Blundell, R. & Bond, S., 1995. "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," Economics Papers 104, Economics Group, Nuffield College, University of Oxford.
- Nitsch, Volker, 2006. "Trade Openness and Urban Concentration: New Evidence," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 21, pages 340-362.
- Maurice J.G. Bun & Jan F. Kiviet, 2002.
"On the Diminishing Returns of Higher-order Terms in Asymptotic Expansions of Bias,"
Tinbergen Institute Discussion Papers
02-099/4, Tinbergen Institute, revised 24 Oct 2002.
- Bun, Maurice J. G. & Kiviet, Jan F., 2003. "On the diminishing returns of higher-order terms in asymptotic expansions of bias," Economics Letters, Elsevier, vol. 79(2), pages 145-152, May.
- Kiviet, Jan F., 1995.
"On bias, inconsistency, and efficiency of various estimators in dynamic panel data models,"
Journal of Econometrics,
Elsevier, vol. 68(1), pages 53-78, July.
- Tom Doan, . "LSDVC: RATS procedure to estimate a dynamic FE model with correction for bias," Statistical Software Components RTS00111, Boston College Department of Economics.
- Crozet, Matthieu & Koenig Soubeyran, Pamina, 2004.
"EU enlargement and the internal geography of countries,"
Journal of Comparative Economics,
Elsevier, vol. 32(2), pages 265-279, June.
- Xiaobo Zhang & Kevin Zhang, 2003. "How Does Globalisation Affect Regional Inequality within A Developing Country? Evidence from China," Journal of Development Studies, Taylor & Francis Journals, vol. 39(4), pages 47-67.
- Allen J. Scott, 2009. "World Development Report 2009: reshaping economic geography," Journal of Economic Geography, Oxford University Press, vol. 9(4), pages 583-586, July.
- Yang, Dennis Tao, 2002. "What has caused regional inequality in China?," China Economic Review, Elsevier, vol. 13(4), pages 331-334, December.
- Timothy C. Ford & Brian Logan & Jennifer Logan, 2009. "NAFTA or Nada? Trade's Impact on U.S. Border Retailers," Growth and Change, Gatton College of Business and Economics, University of Kentucky, vol. 40(2), pages 260-286.
- Monfort, Philippe & Nicolini, Rosella, 1998.
"Regional Convergence and International Integration,"
Discussion Papers (IRES - Institut de Recherches Economiques et Sociales)
1998022, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Monfort, Philippe & Nicolini, Rosella, 2000. "Regional Convergence and International Integration," Journal of Urban Economics, Elsevier, vol. 48(2), pages 286-306, September.
- Jordaan, Jacob A., 2008. "Intra- and Inter-industry Externalities from Foreign Direct Investment in the Mexican Manufacturing Sector: New Evidence from Mexican Regions," World Development, Elsevier, vol. 36(12), pages 2838-2854, December.
- Ravallion, Martin, 2001.
"Growth, inequality, and poverty : looking beyond averages,"
Policy Research Working Paper Series
2558, The World Bank.
- Ravallion, Martin, 2001. "Growth, Inequality and Poverty: Looking Beyond Averages," World Development, Elsevier, vol. 29(11), pages 1803-1815, November.
- Arellano, Manuel & Bond, Stephen, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
Review of Economic Studies,
Wiley Blackwell, vol. 58(2), pages 277-97, April.
- Tom Doan, . "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
- M Arellano & O Bover, 1990.
"Another Look at the Instrumental Variable Estimation of Error-Components Models,"
CEP Discussion Papers
dp0007, Centre for Economic Performance, LSE.
- Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
- Barrios, Salvador & Strobl, Eric, 2009.
"The dynamics of regional inequalities,"
Regional Science and Urban Economics,
Elsevier, vol. 39(5), pages 575-591, September.
- Eric Strobl, & Salvador Barrios, 2006. "The dynamics of regional inequalities," Working Papers 2006-01, FEDEA.
- Salvador Barrios & Eric Strobl, 2005. "The dynamics of regional inequalities," European Economy - Economic Papers 229, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Annekatrin Niebuhr, 2006. "Market access and regional disparities," The Annals of Regional Science, Springer, vol. 40(2), pages 313-334, June.
- Bruno, Giovanni S.F., 2005.
"Approximating the bias of the LSDV estimator for dynamic unbalanced panel data models,"
Elsevier, vol. 87(3), pages 361-366, June.
- Giovanni S.F. Bruno, 2004. "Approximating the Bias of the LSDV Estimator for Dynamic Unbalanced Panel Data Models," KITeS Working Papers 159, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jul 2004.
- Rodriguez-Pose, Andres & Gill, Nicholas, 2006. "How does trade affect regional disparities?," World Development, Elsevier, vol. 34(7), pages 1201-1222, July.
- Javier Sánchez-Reaza, 2002. "The Impact of Trade Liberalization on Regional Disparities in Mexico," Growth and Change, Gatton College of Business and Economics, University of Kentucky, vol. 33(1), pages 72-90.
- Chiquiar, Daniel, 2008.
"Globalization, regional wage differentials and the Stolper-Samuelson Theorem: Evidence from Mexico,"
Journal of International Economics,
Elsevier, vol. 74(1), pages 70-93, January.
- Daniel Chiquiar, 2004. "Globalization, Regional Wage Differentials and the Stolper-Samuelson Theorem: Evidence from México," Working Papers 2004-06, Banco de México.
- Sébastien Breau & David L. Rigby, 2010. "International trade and wage inequality in Canada," Journal of Economic Geography, Oxford University Press, vol. 10(1), pages 55-86, January.
- Jacob A Jordaan, 2008. "Regional foreign participation and externalities: new empirical evidence from Mexican regions," Environment and Planning A, Pion Ltd, London, vol. 40(12), pages 2948-2969, December.
- Richard V. Adkisson & Linda Zimmerman, 2004. "Retail Trade on the U.S.-Mexico Border During the NAFTA Implementation Era," Growth and Change, Gatton College of Business and Economics, University of Kentucky, vol. 35(1), pages 77-89.
- Leonel Muinelo-Gallo & Andreas P. Kyriacou & Oriol Roca-Sagalés, 2013. "Fiscal decentralization and regional disparities: the importance of good governance," Documentos de Trabajo (working papers) 13-03, Instituto de Economía - IECON.
- Farole, Thomas & Reis, Jose Guilherme & Wagle, Swarnim, 2010. "Analyzing trade competitiveness : a diagnostics approach," Policy Research Working Paper Series 5329, The World Bank.
- Ezcurra, Roberto & Rodríguez-Pose, Andrés, 2013.
"Does Economic Globalization affect Regional Inequality? A Cross-country Analysis,"
Elsevier, vol. 52(C), pages 92-103.
- Ezcurra, Roberto & Rodríguez-Pose, Andrés, 2013. "Does economic globalization a ffect regional inequality? A cross-country analysis," CEPR Discussion Papers 9557, C.E.P.R. Discussion Papers.
- Georg Hirte & Christian Lessmann, 2014. "Trade, Integration, and Interregional Inequality," CESifo Working Paper Series 4799, CESifo Group Munich.
- Lessmann, Christian, 2014.
"Spatial inequality and development — Is there an inverted-U relationship?,"
Journal of Development Economics,
Elsevier, vol. 106(C), pages 35-51.
- Christian Lessmann, 2011. "Spatial Inequality and Development - Is there an Inverted-U Relationship?," CESifo Working Paper Series 3622, CESifo Group Munich.
- Guangdong Li & Chuanglin Fang, 2014. "Analyzing the multi-mechanism of regional inequality in China," The Annals of Regional Science, Springer, vol. 52(1), pages 155-182, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.