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Economic integration and the diversification of regional exports: evidence from the Canadian-US free trade agreement

  • Michel Beine
  • Serge Coulombe

We investigate the impact of Canada--U.S. trade integration on the degree of export diversification of the Canadian regions. Trade integration is captured through the decrease of trade-weighted tariffs that were boosted by implementation of the Canadian--U.S. Free Trade Agreement. We found strong evidence to support integration's long-run impact on the patterns of absolute exports diversification. Significantly, this new finding remains robust to the exclusion of the primary sectors and to the potential presence of unit root in the data. Our results lead us to support a positive long-run relationship between trade integration and export diversification. Copyright 2007, Oxford University Press.

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Paper provided by ULB -- Universite Libre de Bruxelles in its series ULB Institutional Repository with number 2013/10417.

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Date of creation: Jan 2007
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Publication status: Published in: Journal of Economic Geography (2007) v.7 n° 1,p.93-111
Handle: RePEc:ulb:ulbeco:2013/10417
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