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Trade and the location of industries in the OECD and European Union

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  • Michael Storper
  • Yun-chung Chen

Abstract

Trade and location theory identifies forces that could lead to locational dispersion (comparative advantage) or locational concentration (scale economies) in the face of globalizing markets, each with different consequences for specialization and the adjustment costs associated with integration. However, these forces can play themselves out in very complex ways if locational change principally affects intermediate production. Moreover, effects of history may be important, if locational patterns which exist prior to integration reflect either strong external economies or, as we argue, strong institutionalized capacities to respond to more open markets. This could especially be the case in the context of Europe, whose territories are generally less specialized than the states of the USA. To see how these different effects are operating today, empirical measurement is required. Using a data set which allows changes in locational distribution of manufacturing industries in the OECD to be measured, we show that Europe does not seem to be 'Americanizing' its economic geography. Many sectors are actually spreading out in Europe, implying that the effects of history have remained strong up to this point. Specialization increases are weak in most European economies as well. The OECD has a more complex picture of spread and concentration. Some of the implications for further research on agglomeration, intra-industry trade, and integration are brought out in the conclusion. Copyright 2002, Oxford University Press.

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Bibliographic Info

Article provided by Oxford University Press in its journal Journal of Economic Geography.

Volume (Year): 2 (2002)
Issue (Month): 1 (January)
Pages: 73-107

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Handle: RePEc:oup:jecgeo:v:2:y:2002:i:1:p:73-107

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Cited by:
  1. Gilles Duranton & Michael Storper, 2005. "Rising Trade Costs? Agglomeration and Trade with Endogenous Transaction Costs," CEP Discussion Papers dp0683, Centre for Economic Performance, LSE.
  2. Nuno Crespo & Maria Paula Fontoura, 2008. "Regional Integration and International Economic Geography in the Portuguese Case - an update," Working Papers Department of Economics 2008/51, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  3. Nuno Crespo & Maria Paula Fontoura, 2009. "Determinant factors of structural similarity at the regional level: evidence from Portugal," Working Papers Department of Economics 2009/28, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  4. Brulhart, Marius & Traeger, Rolf, 2005. "An account of geographic concentration patterns in Europe," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 597-624, November.
  5. Pierre-Philippe Combes & Henry G. Overman, 2003. "The spatial distribution of economic activities in the European Union," LSE Research Online Documents on Economics 20023, London School of Economics and Political Science, LSE Library.
  6. Natalia Vechiu & Farid Makhlouf, 2014. "Economic integration and specialization in production in the EU27: does FDI influence countries’ specialization?," Empirical Economics, Springer, vol. 46(2), pages 543-572, March.
  7. Sklias, Pantelis & Tsampra, Maria, 2012. "Towards an analytical framework of regional integration in Western Balkans," MPRA Paper 36504, University Library of Munich, Germany.
  8. Rodriguez-Pose, Andres & Gill, Nicholas, 2006. "How does trade affect regional disparities?," World Development, Elsevier, vol. 34(7), pages 1201-1222, July.
  9. Krenz, Astrid & Rübel, Gerhard, 2010. "Industrial localization and countries' specialization in the European Union: An empirical investigation," Center for European, Governance and Economic Development Research Discussion Papers 106, University of Goettingen, Department of Economics.
  10. Sklias, Pantelis & Tsampra, Maria, 2011. "Assessing regional integration and business potential in the Western Balkans," MPRA Paper 36341, University Library of Munich, Germany.
  11. Andres Rodriguez-Pose & Nicholas Gill, 2004. "How does trade affect regional inequalities?," ERSA conference papers ersa04p478, European Regional Science Association.
  12. Beyer, Jürgen, 2006. "Verfestigte institutionelle Vielfalt? Die komparativen Vorteile koordinierter Ökonomien und die Internationalisierung von Unternehmen," MPIfG Working Paper 06/8, Max Planck Institute for the Study of Societies.
  13. Nicole Palan, 2010. "Measurement of Specialization – The Choice of Indices," FIW Working Paper series 062, FIW.
  14. Krenz, Astrid & Rübel, Gerhard, 2010. "Industrial localization and countries' specialization in the European Union: An empirical investigation," Center for European, Governance and Economic Development Research Discussion Papers 106, University of Goettingen, Department of Economics.
  15. Mónica Rivera, 2014. "Trade patterns in the process of European integration: Evidence for the intraindustrial exchanges of a Mediterranean peripheral region," The Annals of Regional Science, Springer, vol. 52(1), pages 227-249, January.

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