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The spatial effects of trade openness: a survey

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  • Marius Brülhart

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Abstract

This paper surveys the literature on the implications of trade liberalisation for intra-national economic geographies. Three results stand out. First, neither urban systems models nor new economic geography models imply a robust prediction on the impact of trade openness on spatial concentration. Whether trade promotes concentration or dispersion depends on subtle modelling choices among which it is impossible to adjudicate a priori. Second, empirical evidence mirrors the theoretical indeterminacy: a majority of cross-country studies find no significant effect of openness on urban concentration or regional inequality. Third, the available models predict that, other things equal, regions with inherently less costly access to foreign markets, such as border or port regions, stand to reap the largest gains from trade liberalisation. This prediction is confirmed by the available evidence. Whether trade liberalisation raises or lowers regional inequality therefore depends on each country’s specific geography.

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Bibliographic Info

Article provided by Springer in its journal Review of World Economics.

Volume (Year): 147 (2011)
Issue (Month): 1 (April)
Pages: 59-83

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Handle: RePEc:spr:weltar:v:147:y:2011:i:1:p:59-83

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Related research

Keywords: Trade liberalisation; Regional inequality; Agglomeration; Urban systems; F1; R1;

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Citations

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Cited by:
  1. Nuno Crespo & Maria Paula Fontoura, 2006. "Regional Integration and Internal Economic Geography - an Empirical Evaluation with Portuguese Data," Working Papers Department of Economics 2006/25, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  2. Marius Brülhart & Céline Carrere & Federico Trionfetti, 2011. "How Wages and Employment Adjust to Trade Liberalization: Quasi-Experimental Evidence from Austria," Working Papers halshs-00607748, HAL.
  3. Julio Martínez-Galarraga, 2014. "Market potential estimates in history: a survey of methods and an application to Spain, 1867-1930," Working Papers 0051, European Historical Economics Society (EHES).
  4. Ezcurra, Roberto & Rodríguez-Pose, Andrés, 2013. "Does Economic Globalization affect Regional Inequality? A Cross-country Analysis," World Development, Elsevier, vol. 52(C), pages 92-103.
  5. Andr� Sapir, 2011. "European Integration at the Crossroads: A Review Essay on the 50th Anniversary of Bela Balassa's Theory of Economic Integration," Journal of Economic Literature, American Economic Association, vol. 49(4), pages 1200-1229, December.

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