Growth, Market Structure, and the Welfare Effects of Economic Integration
AbstractThis paper discusses the role of economic integration in a model of endogenous growth where the size of the firm and the interactions between growth and the endogenous structure of the market play a crucial role. The focus is on the pure scale effects of integration and their welfare implications. The main result of the paper is that integration raises growth and welfare if it generates a market that is more competitive and where firms have access to a larger body of technological spillovers. Specifically, these conditions mean two things: (a) the number of domestic firms does not fall so much that in the integrated market there are fewer firms than in autarky; (b) R&D is characterized by spillovers so that one firms' are observable. The model, thus, provides practical guidelines for predicting the effects of integration by looking at how the larger extent of the market affects the organization of industry. Moreover, these conditions are likely to be met in reality, thus suggesting that economic integration is indeed beneficial.
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 Duke University, Department of Economics in its series Working Papers with number 96-12.
Date of creation: 1996
Date of revision:
Contact details of provider:
Postal: Department of Economics Duke University 213 Social Sciences Building Box 90097 Durham, NC 27708-0097
Phone: (919) 660-1800
Fax: (919) 684-8974
Web page: http://econ.duke.edu/
Find related papers by JEL classification:
- E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
- L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Baldwin, Richard E. & Forslid, Rikard, 1998. "Trade and growth Any unfinished business?," European Economic Review, Elsevier, vol. 42(3-5), pages 695-703, May.
- Angelini, P. & Cetorelli, N., 2000.
"Bank Competition and Regulatory Reform: The Case of the Italian Banking Industry,"
380, Banca Italia - Servizio di Studi.
- Nicola Cetorelli & Paolo Angelini, 1999. "Bank competition and regulatory reform: the case of the Italian banking industry," Working Paper Series WP-99-32, Federal Reserve Bank of Chicago.
- Paolo Angelini & Nicola Cetorelli, 2000. "Bank Competition and Regulatory Reform: The Case of the Italian Banking Industry," Temi di discussione (Economic working papers) 380, Bank of Italy, Economic Research and International Relations Area.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Department of Economics Webmaster).
If references are entirely missing, you can add them using this form.