The Spatial Effects of Trade Openness: A Survey
University of Nottingham GEP Research Paper 2010/10
31 Pages Posted: 14 May 2010
Date Written: May 10, 2010
Abstract
This paper surveys the literature on the implications of trade liberalisation for intra-national economic geographies. Three results stand out. First, neither urban systems models nor new economic geography models imply a robust prediction on the impact of trade openness on spatial concentration. Whether trade promotes concentration or dispersion depends on subtle modelling choices among which it is impossible to adjudicate a priori. Second, empirical evidence mirrors the theoretical indeterminacy: a majority of cross-country studies find no significant effect of openness on urban concentration or regional inequality. Third, the available models predict that, other things equal, regions with inherently less costly access to foreign markets, such as border or port regions, stand to reap the largest gains from trade liberalisation. This prediction is confirmed by the available evidence. Whether trade liberalisation raises or lowers regional inequality therefore depends on each country’s specific geography.
Keywords: trade liberalisation, regional inequality, agglomeration, urban systems
JEL Classification: F1, R1
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Transport Costs Decline and Regional Inequalities: Evidence from France
-
The Dynamics of Local Employment in France
By Pierre-philippe Combes, Thierry Magnac, ...
-
The Dynamics of Local Employment in France
By Pierre-philippe Combes, Thierry Magnac, ...
-
An Account of Geographic Concentration Patterns in Europe
By Marius Brülhart and Rolf Traeger
-
Regional Integration, Scale Economies and Industry Location in the European Union
By Marius Brülhart and Johan Torstensson
-
Spatial Concentration and Firm-Level Productivity in France
By Philippe Martin, Thierry Mayer, ...
-
Enlargement and the EU Periphery: The Impact of Changing Market Potential
By Marius Brülhart, Matthieu Crozet, ...