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Economic Integration and Location of Manufacturing Activities: Evidence from Mercosur

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  • Pablo Sanguinetti

    ()

  • Iulia Traistaru

    ()

  • Christian Volpe Martincus

    ()

Abstract

Economic integration leads to a reallocation of resources across sectors and space. Location patterns resulting from North-North and North-South regional trade initiatives have been documented in several studies. However, empirical evidence on South-South agreements is rather limited. In this respect, MERCOSUR provides an interesting case study. This paper aims at answering the following questions: What are the main driving factors explaining location patterns in the Southern Cone? To what extent has the establishment of MERCOSUR affected location of economic activities? Using data for the period 1985-1998, we identify the determinants of manufacturing location patterns and assess their changes in the context of increased economic integration. We find that preferential trade liberalization has fostered the influence of factors underlined by the recent trade theories, such as economies of scale and input-output linkages, relative to comparative advantage considerations. Keywords: Economic Integration, Location of Industrial Activities, MERCOSUR JEL-Classification: F14, F15, L60

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa04p609.

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Date of creation: Aug 2004
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Handle: RePEc:wiw:wiwrsa:ersa04p609

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Citations

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Cited by:
  1. Bagoulla, Corinne & Péridy, Nicolas, 2011. "Market access and the other determinants of North–South manufacturing location choice: An application to the Euro-Mediterranean area," Economic Systems, Elsevier, vol. 35(4), pages 537-561.
  2. Maria Florencia Granato, 2011. "REGIONAL NEW ECONOMIC GEOGRAPHY (refereed paper)," ERSA conference papers ersa10p747, European Regional Science Association.
  3. Volpe Martincus, Christian & Siedschlag, Iulia, 2010. "The Impact of South-South Preferential Trade Agreements on Industrial Development: An Empirical Test," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 25, pages 69-104.
  4. Fernando Borraz & M�ximo Rossi & Daniel Ferres, 2012. "Distributive Effects of Regional Trade Agreements on the ‘Small Trading Partners’: Mercosur and the Case of Uruguay and Paraguay," Journal of Development Studies, Taylor & Francis Journals, vol. 48(12), pages 1828-1843, December.
  5. Gerardo Caetano & Marcel Vaillant, 2004. "¿Qué MERCOSUR y qué Uruguay se necesitan? Apuntes para entender requerimientos recíprocos," Documentos de Trabajo (working papers) 1504, Department of Economics - dECON.
  6. Juan Labraga, 2009. "Política Comercial y Política de Infraestructura en el MERCOSUR," IDB Publications 9328, Inter-American Development Bank.
  7. Pablo Sanguinetti & Iulia Traistaru & Christian Volpe Martincus, 2004. "Economic Integration and Location of Manufacturing Activities: Evidence from Mercosur," ERSA conference papers ersa04p609, European Regional Science Association.

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