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The effect of trade on agglomeration within regions

Author

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  • Carolina Guevara

    (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - ENS de Lyon - École normale supérieure de Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper assesses for the first time the effect of regional trade openness on agglomeration within regions, using regional data on the trade of Colombia. The results of the panel model show that the effect of trade is sufficiently strong to shape the spatial configuration, a structure that rarely changes. The effect varies across regions. On the one hand, trade enhances spatial agglomeration within regions with large home market and location advantages. On the other hand, trade induces dispersion within regions that lack access to international trade or historical advantage. These results hold when controlling for the natural course of agglomeration (regions-pecific time trends), congestion effects in main cities and road infrastructure within regions. Abstract This paper assesses for the first time the effect of regional trade openness on agglomeration within regions, using regional data on the trade of Colombia. The results of the panel model show that the effect of trade is sufficiently strong to shape the spatial configuration, a structure that rarely changes. The effect varies across regions. On the one hand, trade enhances spatial agglomeration within regions with large home market and location advantages. On the other hand, trade induces dispersion within regions that lack access to international trade or historical advantage. These results hold when controlling for the natural course of agglomeration (region-specific time trends), congestion effects in main cities and road infrastructure within regions.

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  • Carolina Guevara, 2015. "The effect of trade on agglomeration within regions," Working Papers halshs-01233389, HAL.
    • Handle: RePEc:hal:wpaper:halshs-01233389
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01233389
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    More about this item

    Keywords

    trade openness; spatial concentration; intra-inequality; congestion; cities;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • F10 - International Economics - - Trade - - - General
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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