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Sectoral Trade Freeness and Agglomeration in the EU: An Empirical Test Strategy

Author

Listed:
  • Gianluca Cafiso

Abstract

This paper studies the evolution of trade freeness and of the agglomeration of production, as well as their relationship, at the sectoral level in a group of EU countries. Our main objective is to test at the sectoral level the conclusions of previous aggregate analyses which find that an inverse relationship between trade costs and agglomeration holds in case of the Home Market Effect. Our sectoral focus requires an original testing approach based on the combination of different bootstrap distributions.

Suggested Citation

  • Gianluca Cafiso, 2012. "Sectoral Trade Freeness and Agglomeration in the EU: An Empirical Test Strategy," CESifo Working Paper Series 4000, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_4000
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    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp4000.pdf
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    References listed on IDEAS

    as
    1. Brulhart, Marius & Traeger, Rolf, 2005. "An account of geographic concentration patterns in Europe," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 597-624, November.
    2. BEHRENS, Kristian & LAMORGESE, Andrea R. & OTTAVIANO, Gianmarco I.P. & TABUCHI, Takatoshi, 2005. "Testing the ‘home market effect’ in a multi-country world," CORE Discussion Papers 2005055, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. Jacks, David S., 2009. "On the death of distance and borders: Evidence from the nineteenth century," Economics Letters, Elsevier, vol. 105(3), pages 230-233, December.
    4. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September.
    5. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    6. Friederike Niepmann & Gabriel J. Felbermayr, 2010. "Globalisation and the Spatial Concentration of Production," The World Economy, Wiley Blackwell, vol. 33(5), pages 680-709, May.
    7. Behrens, Kristian & Lamorgese, Andrea R. & Ottaviano, Gianmarco I.P. & Tabuchi, Takatoshi, 2009. "Beyond the home market effect: Market size and specialization in a multi-country world," Journal of International Economics, Elsevier, vol. 79(2), pages 259-265, November.
    8. Chen, Natalie & Novy, Dennis, 2011. "Gravity, trade integration, and heterogeneity across industries," Journal of International Economics, Elsevier, vol. 85(2), pages 206-221.
    9. Cameron,A. Colin & Trivedi,Pravin K., 2008. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9787111235767, April.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    trade freeness; agglomeration of production; home market effect; bootstrap;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration

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