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Geography, Trade and Growth: Problems and Possibilities for the New Zealand Economy




This paper discusses the latest thinking in the relationships between the economics of trade, geography and industrial clusters. The aim of the paper is to explain the relevance of these various arguments for the economy of New Zealand and to suggest a possible public policy role for overcoming the growth problems associated with geographic periphery. As we will see, much of the current thinking on the relationships between geography, trade and clusters implies that New Zealand’s long-term growth prospects are rather weak. However, it will be argued here that a detailed consideration of these relationships, plus some evidence from the UK, also provides some guidance as to possible strategies which New Zealand can employ to promote growth. In particular, the development of public policies which are specifically aimed at reducing the spatial market-area constraints of the New Zealand small-firm sector may be worthwhile.

Suggested Citation

  • Philip McCann, 2003. "Geography, Trade and Growth: Problems and Possibilities for the New Zealand Economy," Treasury Working Paper Series 03/03, New Zealand Treasury.
  • Handle: RePEc:nzt:nztwps:03/03

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    Cited by:

    1. Procter, Roger, 2008. "Inside the Black box: Policies for Economic Growth," Occasional Papers 08/8, Ministry of Economic Development, New Zealand.
    2. Hans-Jurgen Engelbrecht, 2004. "The transaction sector, the information economy, and economic growth in New Zealand: Taking hazledine seriously," New Zealand Economic Papers, Taylor & Francis Journals, vol. 38(1), pages 87-99.
    3. Falvey, Rodney E & Gemmell, Norman & Chang, Cherry & Zheng, Guanyu, 2014. "Explaining International Differences in the Prices of Tradables and Non-Tradables (with a New Zealand Perspective)," Working Paper Series 3425, Victoria University of Wellington, Chair in Public Finance.
    4. Philip McCann, 2009. "Economic geography, globalisation and New Zealand's productivity paradox," New Zealand Economic Papers, Taylor & Francis Journals, vol. 43(3), pages 279-314.

    More about this item


    trade; geography; clusters; exports; public policy;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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