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Trade liberalization and the modern metropolis

  • Toshihiro Atsumi
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    What is the impact of international trade on cities and rural areas within a country? Existing studies on this topic are based on new economic geography models, which focus on the effect of international trade on the change in the balance between agglomeration and dispersion forces of the manufacturing firms. Recent studies, however, suggest that large cities today can be characterized as specializing in providing business services to host corporate headquarters, rather than as agglomeration of manufacturing. This paper tries to answer the same question by modelling a modern city that provides business services to host corporate headquarters, and argues that the city is likely to grow larger with trade liberalization.

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    File URL: http://www.nottingham.ac.uk/gep/documents/papers/2010/10-02.pdf
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    Paper provided by University of Nottingham, GEP in its series Discussion Papers with number 10/02.

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    Handle: RePEc:not:notgep:10/02
    Contact details of provider: Postal: School of Economics University of Nottingham University Park Nottingham NG7 2RD
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    1. Hanson, Gordon H., 1998. "Regional adjustment to trade liberalization," Regional Science and Urban Economics, Elsevier, vol. 28(4), pages 419-444, July.
    2. Nitsch, Volker, 2006. "Trade Openness and Urban Concentration: New Evidence," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 21, pages 340-362.
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    4. Davis, James C. & Henderson, J. Vernon, 2008. "The agglomeration of headquarters," Regional Science and Urban Economics, Elsevier, vol. 38(5), pages 445-460, September.
    5. Monfort, Philippe & Nicolini, Rosella, 1998. "Regional Convergence and International Integration," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1998022, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
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    8. Duranton, Gilles & Puga, Diego, 2001. "From Sectoral to Functional Urban Specialization," CEPR Discussion Papers 2971, C.E.P.R. Discussion Papers.
    9. OTTAVIANO, Gianmarco & THISSE, Jacques-François, 1999. "Agglomeration and trade revisited," CORE Discussion Papers 1999041, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    10. 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.
    11. Andrew B. Bernard & Joachim Wagner, 1998. "Export Entry and Exit by German Firms," NBER Working Papers 6538, National Bureau of Economic Research, Inc.
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    13. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
    14. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-64, September.
    15. Yukako Ono, 2002. "Outsourcing business services and the role of central administrative offices," Working Paper Series WP-02-01, Federal Reserve Bank of Chicago.
    16. Behrens, Kristian & Gaigne, Carl & Ottaviano, Gianmarco I.P. & Thisse, Jacques-Francois, 2007. "Countries, regions and trade: On the welfare impacts of economic integration," European Economic Review, Elsevier, vol. 51(5), pages 1277-1301, July.
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