Regional integration and production location: what theories (do not) tell us
AbstractThere is broad empirical evidence showing that regional integration considerably influences the choice of firms over the location of production; nevertheless, the theoretical literature on this issue is rather limited. Traditional preferential trade theory does not include the driving force of these changes, that is, economies of scale. The paper surveys recent contributions from the new economic geography and the multinational enterprise literature addressing the issue of the effects of preferential trade, with the aim of examining the main features of the models, and assessing their predictions and policy implications critically. The paper shows, among other things, that the findings are often contradictory, depending upon the underlying hypotheses of the models used. Overall, there is a need of further research on the welfare implications of preferential trade agreements when location effects are considered; policy implications may be relevant, especially for small countries joining preferential trade areas with the expectation of benefiting from the location of economic activity in their territory.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by TRADEAG - Agricultural Trade Agreements in its series Working Papers with number 18862.
Date of creation: 2006
Date of revision:
Contact details of provider:
Web page: http://tradeag.vitamib.com/
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.:
- Krugman, Paul R & Venables, Anthony J, 1995.
"Globalization and the Inequality of Nations,"
The Quarterly Journal of Economics,
MIT Press, vol. 110(4), pages 857-80, November.
- Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," NBER Working Papers 5098, National Bureau of Economic Research, Inc.
- Krugman, Paul & Venables, Anthony J., 1994. "Globalization and the Inequality of Nations," CEPR Discussion Papers 1015, C.E.P.R. Discussion Papers.
- Krugman, Paul & Venables, Anthony J., 1995. "Globalization and the Inequality of Nations," Working Paper Series 430, Research Institute of Industrial Economics.
- Sylvie Montout & Habib Zitouna, 2005. "Does North-South Integration Affect Multinational Firms' Strategies?," Review of International Economics, Wiley Blackwell, vol. 13(3), pages 485-500, 08.
- Krugman, Paul, 1991.
"Increasing Returns and Economic Geography,"
Journal of Political Economy,
University of Chicago Press, vol. 99(3), pages 483-99, June.
- Baldwin, Richard E. & Venables, Anthony J., 1995. "Regional economic integration," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 31, pages 1597-1644 Elsevier.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.