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Do economic integration and fiscal competition help to explain location patterns?

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  • Volpe Martincus, Christian

Abstract

Do trade integration and fiscal competition contribute to shape the economic landscape? The answer is yes. This paper uses a theoretical model and an econometric analysis of Brazilian regional manufacturing employment data over the period 1990-1998 to address this question. Brazil is a natural case study because this country liberalized trade during the 1990s and their sub-national governments engaged in a fiscal dispute. Econometric results show that trade liberalization has had an impact on spatial developments and this effect is increasing over time. Moreover, subsidies also exert an influence, but their relative importance is falling.

Suggested Citation

  • Volpe Martincus, Christian, 2004. "Do economic integration and fiscal competition help to explain location patterns?," ZEI Working Papers B 15-2004, University of Bonn, ZEI - Center for European Integration Studies.
    • Handle: RePEc:zbw:zeiwps:b152004
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    File URL: https://www.econstor.eu/bitstream/10419/39574/1/393969061.pdf
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    References listed on IDEAS

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    1. K.H. Midelfart & H.G. Overman & S.J. Redding & A.J. Venables, 2000. "The location of European industry," European Economy - Economic Papers 2008 - 2015 142, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
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    Cited by:

    1. Sanguinetti, Pablo & Traistaru, Iulia & Volpe Martincus, Christian, 2004. "Economic integration and location of manufacturing activities: Evidence from MERCOSUR," ZEI Working Papers B 11-2004, University of Bonn, ZEI - Center for European Integration Studies.
    2. Camelia Romocea-Turcu, 2008. "Regional disparities in industry location and income: a footloose capital model," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 28(2), pages 145-177, September.
    3. Iulia Traistaru-Siedschlag & Christian Martincus, 2006. "Economic Integration and Manufacturing Concentration Patterns: Evidence from MERCOSUR," Open Economies Review, Springer, vol. 17(3), pages 297-319, July.
    4. Granato, María Florencia, 2005. "Regional integration and its spatial effects within a member country," IOB Working Papers 2005.02, Universiteit Antwerpen, Institute of Development Policy (IOB).
    5. Napoleão Luiz Costa da Silva & Octávio Augusto Fontes Tourinho & Yann Le Boulluec Alves, 2004. "O Impacto da Reforma Tributária na Economia Brasileira: Uma Análise com o Modelo CGE," Discussion Papers 1056, Instituto de Pesquisa Econômica Aplicada - IPEA.
    6. Filipe Lage-De-Sousa, 2006. "Trade Shocks in Brazil: An Investigation of Effects on Regional Manufacturing Wages," ERSA conference papers ersa06p441, European Regional Science Association.
    7. Sanguinetti, Pablo & Volpe Martincus, Christian, 2009. "Tariffs and manufacturing location in Argentina," Regional Science and Urban Economics, Elsevier, vol. 39(2), pages 155-167, March.
    8. Lage de Sousa, Filipe, 2010. "Regional manufacturing wages: dancing to the tune of trade shocks," LSE Research Online Documents on Economics 33500, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    Economic Integration; Fiscal Competition; Location Patterns; Manufacturing Industries; Brazil;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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