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EU enlargement and the internal geography of countries

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  • Crozet, Matthieu
  • Koenig Soubeyran, Pamina

Abstract

This paper focuses on the relation between trade openness and the location of economicactivity in a country. The problematic lies in the context of the EU enlargement process and ofits impact on the location of economic activity inside each of the accessing countries. We develop a new economic geography model based on the original Krugman (1991) model, and show that trade liberalization will foster agglomeration of economic activity in the location that has the lowest-cost access to foreign markets. Our results thus differ from Krugman and Livas's (1996) conclusions. We expect the CEECs' economies to shift economic activity towards EU markets. We provide empirical evidence of this result focusing on the post-1991 Romanian urban system.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 32 (2004)
Issue (Month): 2 (June)
Pages: 265-279

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Handle: RePEc:eee:jcecon:v:32:y:2004:i:2:p:265-279

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Web page: http://www.elsevier.com/locate/inca/622864

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References

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  1. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, American Economic Association, vol. 67(3), pages 297-308, June.
  2. Cheikbossian, G. & Maurel, M., 1997. "The New Geography of Eastern European Trade," DELTA Working Papers, DELTA (Ecole normale supérieure) 97-11, DELTA (Ecole normale supérieure).
  3. Krugman, Paul R & Venables, Anthony J, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 110(4), pages 857-80, November.
  4. Raul Livas Elizondo & Paul Krugman, 1992. "Trade Policy and the Third World Metropolis," NBER Working Papers 4238, National Bureau of Economic Research, Inc.
  5. Glaeser, E.L. & Ades, A.F., 1993. "Trade and Circuses: Explaining Urban Giants," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1646, Harvard - Institute of Economic Research.
  6. Villar, Olga Alonso, 1999. "Spatial distribution of production and international trade: a note," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 29(3), pages 371-380, May.
  7. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  8. repec:fth:iniesr:430 is not listed on IDEAS
  9. Olga Alonso-Villar, 2000. "Large metropolises in the Third World: an explanation," Working Papers, Universidade de Vigo, Departamento de Economía Aplicada 0004, Universidade de Vigo, Departamento de Economía Aplicada.
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