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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
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    1. Gianmarco Ottaviano & Takatoshi Tabuchi & Jacques-FranÁois Thisse, 2002. "Agglomeration and Trade Revisited," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(2), pages 409-436, May.
    2. Andrew B. Bernard & Joachim Wagner, 1998. "Export Entry and Exit by German Firms," NBER Working Papers 6538, National Bureau of Economic Research, Inc.
    3. Ono, Yukako, 2003. "Outsourcing business services and the role of central administrative offices," Journal of Urban Economics, Elsevier, vol. 53(3), pages 377-395, May.
    4. Kristian Behrens & Carl Gaigné & Gianmarco I.P. Ottaviano & Jacques-François Thisse, 2007. "Countries, regions and trade: On the welfare impacts of economic integration," Post-Print halshs-00754213, HAL.
    5. 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.
    6. Gordon H. Hanson, 1994. "Regional Adjustment to Trade Liberalization," NBER Working Papers 4713, National Bureau of Economic Research, Inc.
    7. 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).
    8. David S. Jacks & Christopher M. Meissner & Dennis Novy, 2008. "Trade Costs, 1870-2000," American Economic Review, American Economic Association, vol. 98(2), pages 529-34, May.
    9. 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.
    10. J Vernon Henderson & James Davis, 2004. "The Agglomeration of Headquarters," Working Papers 04-02, Center for Economic Studies, U.S. Census Bureau.
    11. Paluzie i Hernandez, Elisenda, 1999. "Trade policy and regional inequalities," ERSA conference papers ersa99pa231, European Regional Science Association.
    12. Gilles Duranton & Diego Puga, 2002. "From Sectoral to Functional Urban Specialization," NBER Working Papers 9112, National Bureau of Economic Research, Inc.
    13. Andrew B. Bernard & J. Bradford Jensen, 2001. "Why Some Firms Export," NBER Working Papers 8349, National Bureau of Economic Research, Inc.
    14. Jess Gaspar & Edward Glaeser, 1996. "Information Technology and the Future of Cities," NBER Working Papers 5562, National Bureau of Economic Research, Inc.
    15. 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.
    16. 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.
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