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Market Access and Regional Disparities: New Economic Geography in Europe

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Author Info
Niebuhr, Annekatrin
Abstract

New Economic Geography (NEG) has reached a theoretical consolidation while related empirical tests are still scarce. The present paper aims at providing some evidence on the validity of forces emphasised by NEG. The analysis starts from the nominal wage equation derived from the Krugman "core-periphery model" and focuses on one of the main propositions of NEG that access advantages raise factor prices. The paper investigates the significance of market access for regional wages and the geographic extent of demand linkages for a cross section of European regions, also taking into account the effects of national borders. The regression analysis covers the period between 1985 and 2000. The results are consistent with the implication of NEG that demand linkages affect the geographic distribution of economic activities, confirming the basic findings of previous analyses. However, regarding the spatial extent of demand linkages, our results differ significantly from previous findings that point to highly localised effects.

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Paper provided by Hamburg Institute of International Economics in its series Discussion Paper Series with number 26148.

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Date of creation: 2004
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Handle: RePEc:ags:hiiedp:26148

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Keywords: New economic geography; market access; Europe; International Relations/Trade; C21; F12; R12;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. MION, Giordano, 2003. "Spatial externalities and empirical analysis: the case of Italy," CORE Discussion Papers 2003015, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
  2. J. Peter Neary, 2001. "Of Hype and Hyperbolas: Introducing the New Economic Geography," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 536-561, June. [Downloadable!] (restricted)
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  3. Ottaviano, Gianmarco I.P., 2002. "Regional Policy in the Global Economy: Insights from New Economic Geography," Discussion Paper Series 26318, Hamburg Institute of International Economics. [Downloadable!]
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  4. Brakman, Steven & Garretsen, Harry & Schramm, Marc, 2002. "New Economic Geography in Germany: Testing the Helpman-Hanson Model," Discussion Paper Series 26183, Hamburg Institute of International Economics. [Downloadable!]
  5. Keith Head & Thierry Mayer, 2000. "Non-Europe: The magnitude and causes of market fragmentation in the EU," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 136(2), pages 284-314, June. [Downloadable!] (restricted)
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  6. Leamer, Edward E. & Levinsohn, James, 1995. "International trade theory: The evidence," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 26, pages 1339-1394 Elsevier. [Downloadable!] (restricted)
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  7. Head, Charles Keith & Mayer, Thierry, 2003. "The Empirics of Agglomeration and Trade," CEPR Discussion Papers 3985, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  8. Volker Nitsch, 2000. "National borders and international trade: evidence from the European Union," Canadian Journal of Economics, Canadian Economics Association, vol. 33(4), pages 1091-1105, November. [Downloadable!] (restricted)
  9. Paul Krugman, 1992. "A Dynamic Spatial Model," NBER Working Papers 4219, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Mion, Giordano, 2003. "Spatial Externalities and Empirical Analysis: The Case of Italy," ZEW Discussion Papers 03-38, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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  11. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June. [Downloadable!] (restricted)
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  12. Gordon H. Hanson, 1998. "Market Potential, Increasing Returns, and Geographic Concentration," NBER Working Papers 6429, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Pedro Vasconcelos Amaral & Mauro Borges Lemos & Rodrigo Ferreira Simões & Flávia Chein Feres, 2007. "Regional imbalances and market potential in Brazil," Textos para Discussão Cedeplar-UFMG td324, Cedeplar, Universidade Federal de Minas Gerais. [Downloadable!]
  2. Annekatrin Niebuhr, 2005. "The Impact of EU Enlargement on European Border Regions," ERSA conference papers ersa05p114, European Regional Science Association. [Downloadable!]
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