Often countries that are left outside a discriminatory trade agreement are concerned that firms in "sensitive" sectors might move out of their borders to relocate their plants to the countries signing the agreement. From the point of view of recent developments in trade theory, this paper assesses to what extent such fears are grounded. "Derealization" is indeed a threat for discriminated countries but it is not necessarily welfare reducing once long-run growth effects are taken into account.
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Volume (Year): 132 (1996) Issue (Month): III (September) Pages: 427-440 Download reference. The following formats are available: HTML
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Baldwin, Richard E. & Martin, Philippe, 2004.
"Agglomeration and regional growth,"
Handbook of Regional and Urban Economics,
in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 60, pages 2671-2711
Elsevier.
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