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Trade policies, concentration, growth and welfare

  • González-Val, Rafael
  • Lanaspa, Luis
  • Pueyo, Fernando

The aim of this paper is to analyse, through a theoretical model, the effects that the trade integration of two countries may have on industrial location, growth and welfare. The conclusions reached finally depend both on whether the import or the export costs are affected by the trade policies on which the integration process is based and on whether the rich or the poor country introduces them. In general, when integration leads to an increase of industrial concentration in the rich country, the growth rate increases and welfare improves in both countries. If integration means that industry moves to the poor country, the growth rate decreases; in spite of this, in this case the poor country can also improve its welfare.

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File URL: http://mpra.ub.uni-muenchen.de/9730/1/MPRA_paper_9730.pdf
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File URL: http://mpra.ub.uni-muenchen.de/16031/1/MPRA_paper_16031.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 9730.

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Date of creation: 26 May 2008
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Handle: RePEc:pra:mprapa:9730
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  1. Puga, Diego, 2001. "European Regional Policies in Light of Recent Location Theories," CEPR Discussion Papers 2767, C.E.P.R. Discussion Papers.
  2. Lederman, Daniel & Olarreaga, Marcelo & Payton, Lucy, 2006. "Export Promotion Agencies: What Works and What Doesn't," CEPR Discussion Papers 5810, C.E.P.R. Discussion Papers.
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  15. Andrés Rodríguez-Pose & Ugo Fratesi, 2003. "Between development and social policies: the impact of European Structural Funds in Objective 1 Regions," European Economy Group Working Papers 28, European Economy Group.
  16. Kyoko Hirose & Kazuhiro Yamamoto, 2005. "Knowledge spillovers, location of industry, and endogenous growth," Discussion Papers in Economics and Business 05-15, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  17. Roger Vickerman & Klaus Spiekermann & Michael Wegener, 1999. "Accessibility and Economic Development in Europe," Regional Studies, Taylor & Francis Journals, vol. 33(1), pages 1-15.
  18. Hanson, Gordon H, 1997. "Increasing Returns, Trade and the Regional Structure of Wages," Economic Journal, Royal Economic Society, vol. 107(440), pages 113-33, January.
  19. Martin, Philippe & Ottaviano, Gianmarco, 1996. "Growing Locations: Industry Location in a Model of Endogenous Growth," CEPR Discussion Papers 1523, C.E.P.R. Discussion Papers.
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