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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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    Bibliographic Info

    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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    1. 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.
    2. Martin, Philippe & Ottaviano, Gianmarco Ireo Paolo, 1996. "Growing Locations: Industry Location in a Model of Endogenous Growth," CEPR Discussion Papers 1523, C.E.P.R. Discussion Papers.
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    6. Faini, Riccardo, 1996. "Increasing returns, migrations and convergence," Journal of Development Economics, Elsevier, vol. 49(1), pages 121-136, April.
    7. Chen Chunlai, 1997. "Provincial Characteristics and Foreign Direct Investment Location Decision within China," Chinese Economies Research Centre (CERC) Working Papers 1997-16, University of Adelaide, Chinese Economies Research Centre.
    8. Kanbur, Ravi & Zhang, Xiaobo, 2001. "Fifty Years of Regional Inequality in China: A Journey through Revolution, Reform and Openness," CEPR Discussion Papers 2887, C.E.P.R. Discussion Papers.
    9. Tianlun Jian & Jeffrey D. Sachs & Andrew M. Warner, 1996. "Trends in Regional Inequality in China," NBER Working Papers 5412, National Bureau of Economic Research, Inc.
    10. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
    11. Chun-Chung Au & J. Vernon Henderson, 2006. "Are Chinese Cities Too Small?," Review of Economic Studies, Oxford University Press, vol. 73(3), pages 549-576.
    12. 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.
    13. 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.
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