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Regional Specialization And Trade Patterns In Europe

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  • Frias, Isidro
  • Iglesias, Ana

Abstract

In the present paper we will study the effects of the construction of an internal market in Europe in 1992. The question to be answered is whether some regions in Europe have improved their positions in the internal EU trade from a better exploitation of their comparative advantages (productivity, factors endowment,...) and scale economies, as far as regions have two main reasons for trade: specialization in those activities they do the best and the exploitation of scale economies. The evolution of inter industrial trade will reveal whether the expectations of some qualified economist of a deeper specialization of northern European regions in human capital-intensive industries and in labour-intensive industries in the southern regions were correct. Besides, the development of intra industrial trade in this decade will prove if the benefits of scale economies were bigger in the south, where they were less exploited at the outset. Finally, we will also analyse the role of foreign direct investment (which can be observed as another way of exports and shares with trade the causal factors) in the reinforcement of specialization patterns across Europe. In this connection, we identify and analyse the evolution of trade patterns in Europe in the 1990´s through the utilization of Grubel-Lloyd index. Secondly, we utilize several indicators of comparative advantages (sectors average productivity, labour costs, human capital endowment, etc.) and of firms size to study whether they have also undergone some changes as a result of the internal market formation. Although the lack of regional data can make us formulate this analysis for countries rather than for regions, whenever necessary we will supplement it with the patterns of regional specialization within the countries, as far as the regional location of export industries can shed some light on this issue.

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Bibliographic Info

Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa00p427.

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Date of creation: Aug 2000
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Handle: RePEc:wiw:wiwrsa:ersa00p427

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  1. James Brander & Paul Krugman, 1980. "A "Reciprocal Dumping" Model of International Trade," Working Papers, Queen's University, Department of Economics 405, Queen's University, Department of Economics.
  2. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 99(3), pages 483-99, June.
  3. Iglesias, Ana & Frias, Isidro & Vazquez, Emilia, 2001. "Un analisis econometrico de la concentracion industrial en las regiones españolas," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, Euro-American Association of Economic Development, vol. 1(1).
  4. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, Elsevier, vol. 9(4), pages 469-479, November.
  5. Guisan, M.C. & Frias, I., 1997. "Economic Growth and Social Welfare in the European Regions," Faculty of Economics, Universidad de Santiago de Compostela, Faculty of Economics, Applied Econometric and Quantitative Studies 10, Universidad de Santiago de Compostela, Faculty of Economics, Applied Econometric and Quantitative Studies.
  6. Murphy, Kevin M. & Shleifer, Andrei & Vishny, Robert W., 1989. "Industrialization and the Big Push," Scholarly Articles 3606235, Harvard University Department of Economics.
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Cited by:
  1. Gunther Maier & Patrick Lehner, 2002. "Does space finally matter? The position of New Economic Geography in Economic Journals," SCIENZE REGIONALI, FrancoAngeli Editore, FrancoAngeli Editore, vol. 2002(1).
  2. Styliani Christodoulopoulou, 2014. "The effect of currency unions on business cycle correlations: the EMU case," Empirica, Springer, Springer, vol. 41(2), pages 177-222, May.

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