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EU Enlargement and the Internal Geography of Countries


  • Matthieu Crozet

    () (TEAM - Théories et Applications en Microéconomie et Macroéconomie - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Pamina Koenig

    () (TEAM - Théories et Applications en Microéconomie et Macroéconomie - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CREST - Centre de Recherche en Économie et Statistique - INSEE - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique)


This paper focuses on the relation between trade openness and the location of economicactivity in a country. The problematic lies in the context of the EU enlargement process and ofits impact on the location of economic activity inside each of the accessing countries. We develop a new economic geography model based on the original Krugman (1991) model, and show that trade liberalization will foster agglomeration of economic activity in the location that has the lowest-cost access to foreign markets. Our results thus differ from Krugman and Livas's (1996) conclusions. We expect the CEECs' economies to shift economic activity towards EU markets. We provide empirical evidence of this result focusing on the post-1991 Romanian urban system.

Suggested Citation

  • Matthieu Crozet & Pamina Koenig, 2004. "EU Enlargement and the Internal Geography of Countries," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00096821, HAL.
  • Handle: RePEc:hal:cesptp:halshs-00096821
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    References listed on IDEAS

    1. Frankel, Jeffrey A & Rose, Andrew K, 1998. "The Endogeneity of the Optimum Currency Area Criteria," Economic Journal, Royal Economic Society, vol. 108(449), pages 1009-1025, July.
    2. Krugman, Paul & Elizondo, Raul Livas, 1996. "Trade policy and the Third World metropolis," Journal of Development Economics, Elsevier, vol. 49(1), pages 137-150, April.
    3. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 857-880.
    4. Redding, Stephen & Venables, Anthony J., 2004. "Economic geography and international inequality," Journal of International Economics, Elsevier, vol. 62(1), pages 53-82, January.
    5. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    6. Maurel, Mathilde & Cheikbossian, Guillaume, 1998. "The New Geography of Eastern European Trade," Kyklos, Wiley Blackwell, vol. 51(1), pages 45-71.
    7. Olga Alonso-Villar, 2001. "Large Metropolises in the Third World: An Explanation," Urban Studies, Urban Studies Journal Limited, vol. 38(8), pages 1359-1371, July.
    8. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    9. Villar, Olga Alonso, 1999. "Spatial distribution of production and international trade: a note," Regional Science and Urban Economics, Elsevier, vol. 29(3), pages 371-380, May.
    10. Alberto F. Ades & Edward L. Glaeser, 1995. "Trade and Circuses: Explaining Urban Giants," The Quarterly Journal of Economics, Oxford University Press, vol. 110(1), pages 195-227.
    11. Matthieu Crozet & Pamina Koenig-Soubeyran, 2004. "Trade liberalization and the internal geography of countries," Chapters,in: Multinational Firms’ Location and the New Economic Geography, chapter 5 Edward Elgar Publishing.
    12. J. Vernon Henderson, 1996. "Ways to Think about Urban Concentration: Neoclassical Urban Systems versus the New Economic Geography," International Regional Science Review, , vol. 19(1-2), pages 31-36, April.
    13. Monfort, Philippe & Nicolini, Rosella, 2000. "Regional Convergence and International Integration," Journal of Urban Economics, Elsevier, vol. 48(2), pages 286-306, September.
    14. repec:hhs:iuiwop:430 is not listed on IDEAS
    15. Olga Alonso-Villar, 2000. "Spatial Distribution of Production and Education," Documentos de trabajo - Analise Economica 0008, IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia.
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