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Economic Integration and Regional Industrial Specialization: Evidence from the Canadian- US FTA Experience

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Author Info

  • Michel Beine

    (Dulbea, University of Brussels, Belgium)

  • Serge Coulombe

    ()
    (Department of Economics, University of Ottawa)

Abstract

We investigate the impact of Canada-U.S. trade integration on the degree of industrial specialization of the Canadian regions. Trade integration is captured through the decrease of trade-weighted tariffs that were boosted by the implementation of the Canadian-U.S. Free Trade Agreement. We found strong evidence to support integration’s long-run impact on the patterns of absolute industrial diversification. Significantly, this new finding remains robust to the exclusion of the primary sectors and to the potential presence of unit root in the data. Our results lead us to support a positive long-run relationship between trade integration and industrial diversification.

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File URL: http://www.socialsciences.uottawa.ca/eco/pdf/cahiers/0702E-old.pdf
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Bibliographic Info

Paper provided by University of Ottawa, Department of Economics in its series Working Papers with number 0408E.

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Length: 29 pages
Date of creation: 2004
Date of revision:
Handle: RePEc:ott:wpaper:0408e

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Related research

Keywords: Regional specialization; trade integration; FTA; core-periphery structure; panel data;

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References

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  1. Poyago-Theotoky, Joanna, 1998. "R&D Competition in a Mixed Duopoly under Uncertainty and Easy Imitation," Journal of Comparative Economics, Elsevier, vol. 26(3), pages 415-428, September.
  2. Minoru Kitahara & Toshihiro Matsumura, 2006. "Realized Cost-Based Subsidies For Strategic R&D Investments With "Ex Ante" And "Ex Post" Asymmetries," The Japanese Economic Review, Japanese Economic Association, vol. 57(3), pages 438-448.
  3. Klette, T.J. & Moen, J. & Griliches, Z., 1999. "Do Subsidies to Commercial R&D Reduce Market Failures? Microeconometric Evaluation Studies," Papers 16/99, Norwegian School of Economics and Business Administration-.
  4. Ekholm, Karolina & Torstensson, Johan, 1996. "High-Technology Subsidies in General Equilibrium: A Sector-Specific Approach," Working Paper Series 467, Research Institute of Industrial Economics.
  5. Isabel Busom, 2000. "An Empirical Evaluation of The Effects of R&D Subsidies," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 9(2), pages 111-148.
  6. Martin, Stephen & Scott, John T., 2000. "The nature of innovation market failure and the design of public support for private innovation," Research Policy, Elsevier, vol. 29(4-5), pages 437-447, April.
  7. Lakdawalla, Darius & Sood, Neeraj, 2004. "Social insurance and the design of innovation incentives," Economics Letters, Elsevier, vol. 85(1), pages 57-61, October.
  8. Miyagiwa, Kaz & Ohno, Yuka, 2002. "Uncertainty, spillovers, and cooperative R&D," International Journal of Industrial Organization, Elsevier, vol. 20(6), pages 855-876, June.
  9. Petrakis, Emmanuel & Poyago-Theotoky, Joanna, 2002. "R&D Subsidies versus R&D Cooperation in a Duopoly with Spillovers and Pollution," Australian Economic Papers, Wiley Blackwell, vol. 41(1), pages 37-52, March.
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Citations

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Cited by:
  1. Natalia Vechiu & Farid Makhlouf, 2014. "Economic integration and specialization in production in the EU27: does FDI influence countries’ specialization?," Empirical Economics, Springer, vol. 46(2), pages 543-572, March.
  2. Yose Rizal Damuri & Raymond Atje & Arya B. Gaduh, 2006. "Integration and Trade Specialization in East Asia," CSIS Economics Working Paper Series WPE094, Centre for Strategic and International Studies, Jakarta, Indonesia.
  3. Ion Lucian Ceapraz, 2008. "The Concepts Of Specialisation And Spatial Concentration And The Process Of Economic Integration: Theoretical Relevance And Statistical Measures. The Case Of Romania’S Regions," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 2(1), pages 68-93, June.

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