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Trade Shocks and Industrial Location: the Impact of EEC Accession on the UK

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  • Henry Overman
  • L. Alan Winters

Abstract

This paper combines detailed production data (from the ARD) with international trade data by port to examine the impact of accession to the EEC on the location of UK manufacturing. The paper has two main objectives. The first is to test the implications of models of economic geography for the location of economic activity in a developed economy subject to a significant trade shock. The second is to shed new light on the implications of EEC accession for the UK economy. Our results suggest that accession did eventually encourage UK manufacturing to relocate towards the South-East but that within the aggregate some industries retreated north-westwards in the face of increased import competition. Methodologically we have found that proximity to the ports through which trade occurs is a proxy for export market access and import competition and thus helps to explain industrial location. We have also found that the port-composition of UK trade is partly determined by the country-composition of trade. UK accession changed the country-composition of UK trade and via the port-composition induced an exogenous shock to the relative degrees of export market access and import competition in different UK locations. Our results show that employment responded as predicted to these shocks.

Suggested Citation

  • Henry Overman & L. Alan Winters, 2003. "Trade Shocks and Industrial Location: the Impact of EEC Accession on the UK," CEP Discussion Papers dp0588, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp0588
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    References listed on IDEAS

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    Cited by:

    1. Henry G Overman & L Alan Winters, 2005. "The port geography of UK international trade," Environment and Planning A, Pion Ltd, London, vol. 37(10), pages 1751-1768, October.
    2. Stephen J. Redding, 2010. "The Empirics Of New Economic Geography," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 297-311.
    3. Miren Lafourcade & Elisenda Paluzie Hernandez, 2005. "European Integration, FDI and the Internal Geography of Trade: Evidence from Western European Border Regions," Working Papers in Economics 145, Universitat de Barcelona. Espai de Recerca en Economia.
    4. Trejo Nieto , Alejandra Berenice, 2010. "The geographic concentration in Mexican manufacturing industries, an account of patterns, dynamics and explanations: 1988-2003," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 18, pages 37-60.
    5. Filipe Lage-De-Sousa, 2006. "Trade Shocks in Brazil: An Investigation of Effects on Regional Manufacturing Wages," ERSA conference papers ersa06p441, European Regional Science Association.
    6. Redding, Stephen J., 2009. "Economic Geography: a Review of the Theoretical and Empirical Literature," CEPR Discussion Papers 7126, C.E.P.R. Discussion Papers.
    7. Overman, Henry G. & Winters, L. Alan, 2004. "The geography of UK international trade," LSE Research Online Documents on Economics 19998, London School of Economics and Political Science, LSE Library.
    8. Miren Lafourcade & Elisenda Paluzie, 2011. "European Integration, Foreign Direct Investment (FDI), and the Geography of French Trade," Regional Studies, Taylor & Francis Journals, vol. 45(4), pages 419-439.
    9. Benjamin Faber, 2007. "Towards the Spatial Patterns of Sectoral Adjustments to Trade Liberalisation: The Case of NAFTA in Mexico," Growth and Change, Wiley Blackwell, vol. 38(4), pages 567-594.

    More about this item

    Keywords

    UK manufacturing industry; EEC; economic geography;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • 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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