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EU Enlargement and the Internal Geography of Countries

  • Matthieu Crozet

    ()

    (TEAM - Théories et Applications en Microéconomie et Macroéconomie - CNRS - UP1 - Université Panthéon-Sorbonne)

  • Pamina Koenig

    ()

    (TEAM - Théories et Applications en Microéconomie et Macroéconomie - CNRS - UP1 - Université Panthéon-Sorbonne, CREST - Centre de Recherche en Économie et Statistique - INSEE - 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.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00096821.

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Date of creation: Jun 2004
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Handle: RePEc:hal:cesptp:halshs-00096821
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  1. Cheikbossian, Guillaume & Maurel, Mathilde, 1997. "The New Geography of Eastern European Trade," CEPR Discussion Papers 1580, C.E.P.R. Discussion Papers.
  2. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  3. Krugman, Paul R & Venables, Anthony J, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 857-80, November.
  4. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
  5. Alberto F. Ades & Edward L. Glaeser, 1994. "Trade and Circuses: Explaining Urban Giants," NBER Working Papers 4715, National Bureau of Economic Research, Inc.
  6. 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.
  7. Olga Alonso-Villar, 2000. "Large metropolises in the Third World: an explanation," Working Papers 0004, Universidade de Vigo, Departamento de Economía Aplicada.
  8. 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.
  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.
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