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Regional integration and innovation offshoring with occupational choice and endogenous growth

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  • Colin Davis

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Abstract

We study the effects of regional integration on patterns of production and offshoring in a two-region model of occupational choice and endogenous growth. The distribution of asset wealth and allocation of heterogenous workers into innovation and production determines relative market size. When trade costs and knowledge dispersion are high (low), the asset wealthy (poor) region has a larger market and greater shares of innovation and manufacturing. For low to intermediate levels of trade costs, innovation and manufacturing offshoring flows toward the larger region, but when trade costs and knowledge dispersion are high, offshoring flows from the larger asset wealthy region to the smaller asset poor region. Economic growth is unaffected by the shifts in innovation and production that coincide with changes in relative market size. Copyright Springer-Verlag Wien 2013

Suggested Citation

  • Colin Davis, 2013. "Regional integration and innovation offshoring with occupational choice and endogenous growth," Journal of Economics, Springer, vol. 108(1), pages 59-79, January.
  • Handle: RePEc:kap:jeczfn:v:108:y:2013:i:1:p:59-79
    DOI: 10.1007/s00712-012-0319-z
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    References listed on IDEAS

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    8. Colin R. Davis, 2009. "Interregional Knowledge Spillovers And Occupational Choice In A Model Of Free Trade And Endogenous Growth," Journal of Regional Science, Wiley Blackwell, vol. 49(5), pages 855-876.
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    Cited by:

    1. Agenor, Pierre-Richard & Dinh, Hinh T., 2013. "Public policy and industrial transformation in the process of development," Policy Research Working Paper Series 6405, The World Bank.
    2. Colin Davis & Ken-ichi Hashimoto, 2016. "Innovation and Manufacturing Offshoring with Fully Endogenous Productivity Growth," Discussion Papers 1636, Graduate School of Economics, Kobe University.

    More about this item

    Keywords

    Innovation offshoring; Regional integration; Industry location; Occupational choice; Endogenous growth; F43; O30; O40; R12;

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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