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Trade Openness and Urban Concentration: New Evidence


  • Nitsch, Volker

    () (Free University Berlin)


In this paper, I reexamine the empirical relationship between trade openness and urban concentration. Using a panel data set of more than 110 countries for the period from 1970 through 2000, I find that previous results of a negative association between trade openness and the size of a country's largest city are not robust. More importantly, the openness-concentration link disappears completely, once reverse causality and the endogeneity of trade are accounted for. There is no evidence that trade liberalization significantly reduces urban concentration. Similarly, openness is insignificant if trade is instrumented by geographic characteristics.

Suggested Citation

  • Nitsch, Volker, 2006. "Trade Openness and Urban Concentration: New Evidence," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 21, pages 340-362.
  • Handle: RePEc:ris:integr:0359

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    Cited by:

    1. Frederick van der Ploeg & Steven Poelhekke, 2008. "Globalization and the rise of mega-cities in the developing world," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 1(3), pages 477-501.
    2. Toshihiro Atsumi, "undated". "Trade liberalization and the modern metropolis," Discussion Papers 10/02, University of Nottingham, GEP.
    3. Toshihiro Atsumi, "undated". "Silk, Regional Rivalry, and the Impact of the Port Openings in Nineteenth Century Japan," Discussion Papers 09/15, University of Nottingham, GEP.
    4. Gilles Duranton, 2007. "From cities to productivity and growth in developing countries," Working Papers tecipa-306, University of Toronto, Department of Economics.
    5. Andrés Rodríguez‐Pose, 2012. "Trade and Regional Inequality," Economic Geography, Clark University, vol. 88(2), pages 109-136, April.
    6. Marius Brülhart, 2011. "The spatial effects of trade openness: a survey," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(1), pages 59-83, April.
    7. Giray Gozgor & Baris Kablamaci, 2015. "What happened to urbanization in the globalization era? An empirical examination for poor emerging countries," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 55(2), pages 533-553, December.
    8. Atsumi, Toshihiro, 2010. "Silk, regional rivalry, and the impact of the port openings in nineteenth century Japan," Journal of the Japanese and International Economies, Elsevier, vol. 24(4), pages 519-539, December.
    9. Ernesto M. Pernia & Janine Elora M. Lazatin, 2016. "Do Regions Gain from an Open Economy?," UP School of Economics Discussion Papers 201602, University of the Philippines School of Economics.
    10. Zhang, Yuan & Wan, Guanghua, 2017. "Exploring the Trade–Urbanization Nexus in Developing Economies: Evidence and Implications," ADBI Working Papers 636, Asian Development Bank Institute.
    11. Kandogan, Yener, 2014. "The effect of foreign trade and investment liberalization on spatial concentration of economic activity," International Business Review, Elsevier, vol. 23(3), pages 648-659.

    More about this item


    Liberalization; Primacy; Trade; Policy; Location;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • 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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