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Trading Arrangements and Industrial Development

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  • Diego Puga
  • Anthony J. Venables

Abstract

This paper outlines a new approach for analysing the role of trade in promoting industrial development. It offers an explanation as to why firms are reluctant to move to economics with lower labour costs, and shows how trade liberalisation can change the incentives for firms to locate in developing countries. Unilaterally liberalising imports of manufcatures can promote industrialisation, but membership of a preferential trading arrangement is likley to create larger gains. South-South PTAs will be sensitive to the market size of member states, while North-South PTAs seem to offer better prospects- for participating Southern economies, if not for excluded countries.

Suggested Citation

  • Diego Puga & Anthony J. Venables, 1996. "Trading Arrangements and Industrial Development," CEP Discussion Papers dp0319, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp0319
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    References listed on IDEAS

    as
    1. Antonio Spilimbergo & Gordon H. Hanson, 1999. "Illegal Immigration, Border Enforcement, and Relative Wages: Evidence from Apprehensions at the U.S.-Mexico Border," American Economic Review, American Economic Association, vol. 89(5), pages 1337-1357, December.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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