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Sectoral Trade Freeness and Agglomeration in the EU: An Empirical Test Strategy

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  • Gianluca Cafiso

Abstract

This paper studies the evolution of trade freeness and of the agglomeration of production, as well as their relationship, at the sectoral level in a group of EU countries. Our main objective is to test at the sectoral level the conclusions of previous aggregate analyses which find that an inverse relationship between trade costs and agglomeration holds in case of the Home Market Effect. Our sectoral focus requires an original testing approach based on the combination of different bootstrap distributions.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2012/wp-cesifo-2012-11/cesifo1_wp4000.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4000.

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Date of creation: 2012
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Handle: RePEc:ces:ceswps:_4000

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Related research

Keywords: trade freeness; agglomeration of production; home market effect; bootstrap;

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  1. Behrens, Kristian & Lamorgese, Andrea R. & Ottaviano, Gianmarco I.P. & Tabuchi, Takatoshi, 2009. "Beyond the home market effect: Market size and specialization in a multi-country world," Journal of International Economics, Elsevier, vol. 79(2), pages 259-265, November.
  2. BEHRENS, Kristian & LAMORGESE, Andrea R. & OTTAVIANO, Gianmarco I.P. & TABUCHI, Takatoshi, 2005. "Testing the ‘home market effect’ in a multi-country world," CORE Discussion Papers 2005055, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September.
  4. James E. Anderson & Eric van Wincoop, 2001. "Gravity with Gravitas: A Solution to the Border Puzzle," NBER Working Papers 8079, National Bureau of Economic Research, Inc.
  5. Niepmann, Friederike & Felbermayr, Gabriel, 2008. "Globalization and the spatial concentration of production," Munich Reprints in Economics 19332, University of Munich, Department of Economics.
  6. Marius Brülhart & Rolf Traeger, 2003. "An Account of Geographic Concentration Patterns in Europe," ERSA conference papers ersa03p473, European Regional Science Association.
  7. Chen, Natalie & Novy, Dennis, 2011. "Gravity, trade integration, and heterogeneity across industries," Journal of International Economics, Elsevier, vol. 85(2), pages 206-221.
  8. David S. Jacks, 2009. "On the Death of Distance and Borders: Evidence from the Nineteenth Century," NBER Working Papers 15250, National Bureau of Economic Research, Inc.
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