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Agglomeration and Economic Development: Import Substitution vs. Trade Liberalisation

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Author Info
Puga, Diego
Venables, Anthony J

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Abstract

This paper analyzes a model of economic development in which international differences in industrial structure and income are caused by the agglomeration of industry in a subset of countries. Economic development may not be a gradual process of convergence by all countries but instead involve countries moving sequentially from the group of poor countries to the group of rich countries. The role of trade policy in promoting industrialization is studied. While both import substitution and unilateral trade liberalization may be successful in attracting industry, they attract different sectors and welfare levels are higher under trade liberalization.

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Publisher Info
Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 109 (1999)
Issue (Month): 455 (April)
Pages: 292-311
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Handle: RePEc:ecj:econjl:v:109:y:1999:i:455:p:292-311

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  1. Jörg MAYER, 2004. "Industrialization In Developing Countries: Some Evidence From A New Economic Geography Perspective," UNCTAD Discussion Papers 174, United Nations Conference on Trade and Development. [Downloadable!]
  2. Fugazza, Marco & Robert-Nicoud, Frédéric, 2006. "Can South-South Trade Liberalisation Stimulate North-South Trade?," CEPR Discussion Papers 5699, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  3. Rytchkov Oleg & Shevyakhova Elizaveta, 2004. "Regional Reallocation of Russian Industry in Transition," EERC Working Paper Series 04-10e, EERC Research Network, Russia and CIS. [Downloadable!]
  4. Ayele Gelan, 2007. "Trade Policy and Urban-Rural Inequalities In LDCS: A Simulation Experiment With A New Economic Geography Model," Working Papers id:1068, esocialsciences.com. [Downloadable!]
  5. BEHRENS, Kristian, 2003. "International trade and internal geography revisited," LEG - Document de travail - Economie 2003-09, LEG, Laboratoire d'Economie et de Gestion, CNRS UMR 5118, Université de Bourgogne. [Downloadable!]
  6. Temple, Jonathan, 2001. "Growing into Trouble: Indonesia After 1966," CEPR Discussion Papers 2932, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  7. Stéphane VIROL (IERSO-IFReDE-GRES), 2006. "Three dimensions of regional integration process in Europe: an approach by spatial econometrics (In French)," Cahiers du GRES 2006-16, Groupement de Recherches Economiques et Sociales. [Downloadable!]
  8. Henderson, J. Vernon & Shalizi, Zmarak & Venables, Anthony J., 2000. "Geography and development," Policy Research Working Paper Series 2456, The World Bank. [Downloadable!]
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  9. Thede, Susanna, 2007. "Trade and Agglomeration: the Strategic use of Protection Revisited," Working Papers 2007:7, Lund University, Department of Economics. [Downloadable!]
  10. Roberto Ezcurra & Andrés Rodríguez-Pose, 2009. "Does Decentralization Matter for Regional Disparities? A Cross-Country Analysis," SERC Discussion Papers 0025, Spatial Economics Research Centre, LSE. [Downloadable!]
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  11. Ashok S Guha & Brishti Guha, 2005. "Trade, Growth and Increasing Returns to Infrastructure: The Role of the Sophisticated Monopolist," Working Papers 19-2005, Singapore Management University, School of Economics. [Downloadable!]
  12. Puga, Diego, 2001. "European Regional Policies in Light of Recent Location Theories," CEPR Discussion Papers 2767, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  13. Thede, Susanna, 2002. "Trade Protection and the Location of Production," Working Papers 2002:15, Lund University, Department of Economics. [Downloadable!]
  14. Pack, Howard & Paxson, Christina, 1999. "Inter-industry labor mobility in Taiwan, China," Policy Research Working Paper Series 2154, The World Bank. [Downloadable!]
  15. Luis Fernando Lanaspa & Fernando Sanz, 2004. "Regional policy and industrial location decisions," Investigaciones Economicas, Fundación SEPI, vol. 28(1), pages 67-87, January. [Downloadable!]
  16. Paolo Epifani, 2001. "Heckscher-Ohlin and Agglomeration," CESPRI Working Papers 126, CESPRI, Centre for Research on Innovation and Internationalisation, Universita' Bocconi, Milano, Italy, revised Dec 2001. [Downloadable!]
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  17. Kurt Hafner, 2004. "Economic Development and Agglomeration: Research Activity and Tax Competition in a Static Equilibrium Model," DEGIT Conference Papers c009_023, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
  18. Kenmei Tsubota, 2009. "Location and organization choice of firms," KIER Working Papers 679, Kyoto University, Institute of Economic Research. [Downloadable!]
  19. Fukase, Emiko & Martin, Will, 1999. "A Quantitative evaluation of Vietnam's accession to the ASEAN Free Trade Area," Policy Research Working Paper Series 2220, The World Bank. [Downloadable!]
  20. Kurt Hafner, 2004. "Industrial Agglomeration and Economic Development," cege – Center for European, Governance and Economic Development Research Discussion Papers 31, cege – Center for European, Governance and Economic Development Research, University of Goettingen (Germany).. [Downloadable!]
  21. Alessia Lo Turco, 2005. "South-South Trade Agreements, Location of Production and Inequality in Latin America," Ibero America Institute for Econ. Research (IAI) Discussion Papers 127, Ibero-America Institute for Economic Research. [Downloadable!]
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