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The Location Effects of Isolation

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  • Gianmarco I. P. Ottaviano

Abstract

Often countries that are left outside a discriminatory trade agreement are concerned that firms in "sensitive" sectors might move out of their borders to relocate their plants to the countries signing the agreement. From the point of view of recent developments in trade theory, this paper assesses to what extent such fears are grounded. "Derealization" is indeed a threat for discriminated countries but it is not necessarily welfare reducing once long-run growth effects are taken into account.

Suggested Citation

  • Gianmarco I. P. Ottaviano, 1996. "The Location Effects of Isolation," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 132(III), pages 427-440, September.
  • Handle: RePEc:ses:arsjes:1996-iii-12
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    File URL: http://www.sjes.ch/papers/1996-III-12.pdf
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    Cited by:

    1. Manzocchi, S. & Ottaviano, G.I.P., 1999. "Outsiders in Economic Integration: the Case of a Transition Economy," Economics Working Papers eco99/32, European University Institute.
    2. Baldwin, Richard E. & Martin, Philippe, 2004. "Agglomeration and regional growth," Handbook of Regional and Urban Economics,in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 60, pages 2671-2711 Elsevier.
    3. Ottaviano, Gianmarco I. P. & Puga, Diego, 1997. "Agglomeration in a global economy: a survey," LSE Research Online Documents on Economics 20324, London School of Economics and Political Science, LSE Library.
    4. Simonetta Longhi & Peter Nijkamp & Iulia Traistaru, 2003. "Determinants of Manufacturing Location in EU Accession Countries," ERSA conference papers ersa03p310, European Regional Science Association.

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