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International convergence and local divergence

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Cristobal, Adolfo

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Abstract

This work presents a north-south endogenous-growth model that reproduces some recent EU stylized facts: convergence between countries, divergence between the same countries, more spatial concentration of economic activity and higher growth rates. We claim that the ongoing technological reduction of transaction costs can conceivably spur those phenomena, specially if a regional productive duality within the less-developed countries were reinforced by a biased incidence of that fall in transaction costs. A key element is Grossman and Helpman's complementarity between innovation and imitation. The channels that allow for higher growth-rates are migrations and scale-effects in the industrialized regions of the poorest countries.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 219.

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Date of creation: 2005
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Handle: RePEc:pra:mprapa:219

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Find related papers by JEL classification:
R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes
F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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  1. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June. [Downloadable!] (restricted)
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  2. Chen Chunlai, . "Provincial Characteristics And Foreign Direct Investment Location Decision Within China," Working Papers 97_16, Chinese Economies Research Centre.
  3. Ciccone, Antonio, 2002. "Agglomeration effects in Europe," European Economic Review, Elsevier, vol. 46(2), pages 213-227, February. [Downloadable!] (restricted)
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  4. Chun-Chung Au & J. Vernon Henderson, 2006. "Are Chinese Cities Too Small?," Review of Economic Studies, Blackwell Publishing, vol. 73(3), pages 549-576, 07. [Downloadable!] (restricted)
  5. Lee G. Branstetter & Robert C. Feenstra, 1999. "Trade and Foreign Direct Investment in China: A Political Economy Approach," NBER Working Papers 7100, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Bentolila, Samuel, 1997. "Sticky labor in Spanish regions," European Economic Review, Elsevier, vol. 41(3-5), pages 591-598, April. [Downloadable!] (restricted)
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  7. Martin, Philippe & I.P. Ottaviano, Gianmarco, 1999. "Growing locations: Industry location in a model of endogenous growth," European Economic Review, Elsevier, vol. 43(2), pages 281-302, February. [Downloadable!] (restricted)
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  8. Poncet, Sandra, 2006. "Provincial migration dynamics in China: Borders, costs and economic motivations," Regional Science and Urban Economics, Elsevier, vol. 36(3), pages 385-398, May. [Downloadable!] (restricted)
  9. Jian, Tianlun & Sachs, Jeffrey D. & Warner, Andrew M., 1996. "Trends in regional inequality in China," China Economic Review, Elsevier, vol. 7(1), pages 1-21. [Downloadable!] (restricted)
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