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Internal Geography, International Trade, and Regional Specialization

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  • A. Kerem Coşar
  • Pablo D. Fajgelbaum

Abstract

We introduce an internal geography to the canonical model of international trade driven by comparative advantages to study the regional effects of external economic integration. The model features a dual-economy structure, in which locations near international gates specialize in export-oriented sectors while more distant locations do not trade with the rest of the world. The theory rationalizes patterns of specialization, employment, and relative incomes observed in developing countries that opened up to trade. We find regional specialization patterns consistent with the model in industry-level data from Chinese prefectures.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19697.

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Date of creation: Dec 2013
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Handle: RePEc:nbr:nberwo:19697

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Citations

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Cited by:
  1. Markus Eberhardt & Zheng Wang & Zhihong Yu, 2014. "From One to Many Central Plans: Drug Advertising Inspections and Intra-National Protectionism in China," CESifo Working Paper Series 4682, CESifo Group Munich.
  2. Stephen J. Redding & Matthew A. Turner, 2014. "Transportation Costs and the Spatial Organization of Economic Activity," CEP Discussion Papers dp1277, Centre for Economic Performance, LSE.
  3. repec:clg:wpaper:2013-28 is not listed on IDEAS
  4. A. Kerem Cosar & Banu Demir, 2014. "Domestic Road Infrastructure and International Trade: Evidence from Turkey," Koç University-TUSIAD Economic Research Forum Working Papers 1406, Koc University-TUSIAD Economic Research Forum.
  5. Ferdinando Monte, 2014. "Local Transmission of Trade Shocks," Working Papers 2014-001, Human Capital and Economic Opportunity Working Group.

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