Preferential trading arrangements and industrial location
This paper considers the location effects of geographically discriminatory trade policy. A preferential move towards a customs union pulls industry into the integrating countries. When internal barriers fall below some critical level, input-output links between imperfectly competitive firms lead some customs union countries to gain industry at the expense of others. A hub- and-spoke arrangement favours location in the hub, with better reciprocal access induces agglomeration in the hub and may trigger disparities between the spokes.
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- Brülhart, Marius, 1996. "Regional Integration, Scale Economies and Industry Location in the European Union," CEPR Discussion Papers 1435, C.E.P.R. Discussion Papers. Full references (including those not matched with items on IDEAS)
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