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Globalization, interregional and international inequalities

  • Zeng, Dao-Zhi
  • Zhao, Laixun

This paper examines the impact of globalization on interregional and international inequalities in a setup of two countries and four regions, under international mobility of capital. In contrast to the literature, countries and regions are not required to be symmetric. We find that the aforementioned inequalities are closely related to the country size, region size, the degree of globalization (e.g., capital mobility and trade costs) and the level of local infrastructure. In particular, international trade behaves as a dispersion force when capital is internationally mobile for small countries such that reducing domestic transport costs lowers its interregional inequality, but the opposite can be true for large countries or when capital is internationally immobile.

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

Volume (Year): 67 (2010)
Issue (Month): 3 (May)
Pages: 352-361

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Handle: RePEc:eee:juecon:v:67:y:2010:i:3:p:352-361
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622905

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