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International trade and internal geography revisited

Author

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  • BEHRENS, Kristian

    (LATEC - CNRS UMR 5118 - MSH - Université de Bourgogne)

Abstract

Trade liberalization and trade policy obviously affect the internal distribution of economic activities within a liberalizing country. We show that the impact of decreasing international trade costs on the regional distribution of economic activities crucially depends on the value of transport costs in-ternal to the country. Trade liberalization in developing countries with poor internal infrastructures and small volumes of interregional trade is likely to increase regional disparities, while developed countries with good internal infrastructures and large volumes of interregional trade are likely to experience redispersion. We argue that the way transport and trade costs are modeled might have a crucial impact on the results obtained. / La libéralisation du commerce et la politique commerciale affectent manifestement la répartition interne de l'activité économique d'un pays. Nous montrons que l'impact d'une baisse des coûts d'échange sur la répartition régionale de l'activité économique dépend de manière cruciale de la valeur des coûts de transport à l'intérieur du pays. Tandis qu'une libéralisation dans les pays en voie de développement, caractérisés par de mauvaises infrastructures et de faibles volumes d'échanges interrégionaux, est susceptible d'accroître les inégalités régionales, cette même libéralisation dans les pays développés est susceptible de mener à une redispersion de l'activité. Nous montrons que la manière dont nous modélisons les coûts de transport et d'échange pourrait significativement influencer les résultats obtenus.

Suggested Citation

  • BEHRENS, Kristian, 2003. "International trade and internal geography revisited," LEG - Document de travail - Economie 2003-09, LEG, Laboratoire d'Economie et de Gestion, CNRS, Université de Bourgogne.
  • Handle: RePEc:lat:legeco:2003-09
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    Cited by:

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    2. Marius Brülhart & Pamina Koenig, 2006. "New economic geography meets Comecon: Regional wages and industry location in central Europe," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 14(2), pages 245-267, April.
    3. Alejandra Trejo, 2011. "Territorial Competitiveness In A Globalised Economy: The Role Of Transport Costs And Liberalisation," ERSA conference papers ersa10p178, European Regional Science Association.

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    Keywords

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    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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