International convergence and local divergence
This paper presents an East-West endogenous-growth model that reproduces recent stylized facts applicable to the trade liberalization process of many developing countries: convergence with the rest of the world, higher internal divergence, increasing spatial concentration of economic activity and higher growth rates. We claim that the ongoing reduction of manufacturing trade costs may generate a net inflow of global demand towards the industrialized cores of developing countries. This will induce a reallocation of labor from traditional to modern sectors. In turn, such a sectoral shift may enlarge the catch-up (imitation) potential of developing countries and raise global growth rates, due to Grossman and Helpman's complementarity between imitative and innovative activities. Although advanced economies may become relatively worse off, the effect on growth rates may allow them to gain in absolute terms.
|Date of creation:||Aug 2008|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.iset.ge/|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jian, Tianlun & Sachs, Jeffrey D. & Warner, Andrew M., 1996.
"Trends in regional inequality in China,"
China Economic Review,
Elsevier, vol. 7(1), pages 1-21.
- Tianlun Jian & Jeffrey D. Sachs & Andrew M. Warner, 1996. "Trends in Regional Inequality in China," NBER Working Papers 5412, National Bureau of Economic Research, Inc.
- Jian, T & Sachs, J-D & Warner, A-M, 1995. "Trends in Regional Inequality in China," Papers 518, Harvard - Institute for International Development.
- Kanbur, Ravi & Zhang, Xiaobo, 2001.
"Fifty Years of Regional Inequality in China: A Journey through Revolution, Reform and Openness,"
CEPR Discussion Papers
2887, C.E.P.R. Discussion Papers.
- Kanbur, Ravi & Zhang, Xiaobo, 2001. "Fifty Years Of Regional Inequality In China: A Journey Through Revolution, Reform And Openness," Working Papers 7236, Cornell University, Department of Applied Economics and Management.
- Poncet, Sandra, 2006. "Provincial migration dynamics in China: Borders, costs and economic motivations," Regional Science and Urban Economics, Elsevier, vol. 36(3), pages 385-398, May.
- Martin, Philippe & I.P. Ottaviano, Gianmarco, 1999.
"Growing locations: Industry location in a model of endogenous growth,"
European Economic Review,
Elsevier, vol. 43(2), pages 281-302, February.
- 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.
- Chen Chunlai, 1997. "Provincial Characteristics and Foreign Direct Investment Location Decision within China," Chinese Economies Research Centre (CERC) Working Papers 1997-16, University of Adelaide, Chinese Economies Research Centre.
- Antonio Ciccone, 1998.
"Agglomeration-effects in Europe,"
Economics Working Papers
499, Department of Economics and Business, Universitat Pompeu Fabra, revised Aug 1999.
- Chun-Chung Au & J. Vernon Henderson, 2006. "Are Chinese Cities Too Small?," Review of Economic Studies, Oxford University Press, vol. 73(3), pages 549-576.
- Branstetter, Lee G. & Feenstra, Robert C., 2002.
"Trade and foreign direct investment in China: a political economy approach,"
Journal of International Economics,
Elsevier, vol. 58(2), pages 335-358, December.
- Lee G. Branstetter & Robert C. Feenstra, 1999. "Trade and Foreign Direct Investment in China: A Political Economy Approach," NBER Working Papers 7100, National Bureau of Economic Research, Inc.
- James E. Rauch, 1996.
"Networks versus Markets in International Trade,"
NBER Working Papers
5617, National Bureau of Economic Research, Inc.
- Giannetti, Mariassunta, 2002. "The effects of integration on regional disparities: Convergence, divergence or both?," European Economic Review, Elsevier, vol. 46(3), pages 539-567, March.
- Bentolila, Samuel, 1997.
"Sticky labor in Spanish regions,"
European Economic Review,
Elsevier, vol. 41(3-5), pages 591-598, April.
- Faini, Riccardo, 1996. "Increasing returns, migrations and convergence," Journal of Development Economics, Elsevier, vol. 49(1), pages 121-136, April.
When requesting a correction, please mention this item's handle: RePEc:tbs:wpaper:08-008. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zaier Aouani)
If references are entirely missing, you can add them using this form.