IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

A U-shaped Europe?: A simulation study of industrial location

  • Forslid, Rikard
  • Haaland, Jan I.
  • Midelfart Knarvik, Karen Helene

This paper uses a full-scale CGE-model - calibrated on 1992 data - to investigate the effects of European integration on the location of industrial production. Our results reveal large differences among individual industries. Industries with high scale elasticities typically display a non-monotonous relationship between trade liberalisation and concentration, with maximal concentration for intermediate trade costs. Other industries, more driven by comparative advantage, become more and more concentrated as trade costs are lowered. On the aggregate European level we find an (inverse) U-shaped relation between trade costs and concentration, with Europe 1992 close to the peak of concentration. The results also show a close correlation between real income gains and growth in manufacturing production; we label this an "externality shifting" effect - gains from pecuniary externalities in the manufacturing sectors. Finally, we note that nominal factor prices co-vary as regions specialise, while in relative terms there are traces of the Stolper-Samelson theorem.

(This abstract was borrowed from another version of this item.)

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/B6V6D-44GMFWM-1/2/75c16d460a274c7122a986db92571ab3
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 57 (2002)
Issue (Month): 2 (August)
Pages: 273-297

as
in new window

Handle: RePEc:eee:inecon:v:57:y:2002:i:2:p:273-297
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505552

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Rikard Forslid & Ian Wooton, 2003. "Comparative Advantage and the Location of Production," Review of International Economics, Wiley Blackwell, vol. 11(4), pages 588-603, 09.
  2. Venables, Anthony J, 1993. "Equilibrium Locations of Vertically Linked Industries," CEPR Discussion Papers 802, C.E.P.R. Discussion Papers.
  3. Amiti, Mary, 1998. "Inter-industry trade in manufactures: Does country size matter?," Journal of International Economics, Elsevier, vol. 44(2), pages 231-255, April.
  4. Puga, Diego & Venables, Anthony J, 1996. "The Spread of Industry: Spatial Agglomeration in Economic Development," CEPR Discussion Papers 1354, C.E.P.R. Discussion Papers.
  5. Maskus, Keith E. & Penubarti, Mohan, 1995. "How trade-related are intellectual property rights?," Journal of International Economics, Elsevier, vol. 39(3-4), pages 227-248, November.
  6. Donald R. Davis, 1997. "The Home Market, Trade and Industrial Structure," Harvard Institute of Economic Research Working Papers 1800, Harvard - Institute of Economic Research.
  7. Chris Allen & Michael Gasiorek & Alasdair Smith, 1998. "The competition effects of the Single Market in Europe," Economic Policy, CEPR;CES;MSH, vol. 13(27), pages 439-486, October.
  8. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  9. Helpman, E., 1995. "The Size of Regions," Papers 14-95, Tel Aviv.
  10. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," NBER Working Papers 5098, National Bureau of Economic Research, Inc.
  11. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
  12. Deardoff, A.V. & Brown, D.K. & Stern, R.M. & Fox, A.K., 1995. "Computational Analysis of Goods and Services Liberalization in the Uruguay Round," Working Papers 379, Research Seminar in International Economics, University of Michigan.
  13. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, June.
  14. Gasiorek, Michael & Smith, Alasdair & Venables, Anthony J, 1992. "`1992': Trade and Welfare; A General Equilibrium Model," CEPR Discussion Papers 672, C.E.P.R. Discussion Papers.
  15. P Krugman & Anthony J. Venables, 1993. "Intergration," CEP Discussion Papers dp0172, Centre for Economic Performance, LSE.
  16. Forslid, R. & Haaland, J.I. & Knarvik, K.H.M. & Maestad, O., 1999. "Integration and Transition: Scenarios for Location of Production and Trade in Europe," Papers 13/99, Norwegian School of Economics and Business Administration-.
  17. Haaland, Jan I. & Norman, Victor D, 1992. "Global Production Effects of European Integration," CEPR Discussion Papers 669, C.E.P.R. Discussion Papers.
  18. Richard E. Baldwin & Joseph F. Francois & Richard Portes, 1997. "The costs and benefits of eastern enlargement: the impact on the EU and central Europe," Economic Policy, CEPR;CES;MSH, vol. 12(24), pages 125-176, 04.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:inecon:v:57:y:2002:i:2:p:273-297. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.