Integration and the Competitiveness of Peripheral Industry
This paper analyses economic integration between two economies; one central, with a large local market, and the other peripheral, with a small local market. Each economy has an imperfectly competitive manufacturing sector. Trade liberalization creates a strong incentive for the imperfectly competitive industry to concentrate in the central region, near the large market. This may cause the direction of net trade to be the opposite of that predicted by factor endowments. This effect may be offset by a lower wage in the periphery than in the centre; we find that in the early stages of integration relative wages in the centre and periphery diverge, with convergence occurring only in the later stages.
|Date of creation:||Jan 1990|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:363. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()The email address of this maintainer does not seem to be valid anymore. Please ask to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.