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Sectoral Trade Freeness and Agglomeration in the EU: An Empirical Test Strategy

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  • Gianluca Cafiso

Abstract

This paper studies the evolution of trade freeness and of the agglomeration of production, as well as their relationship, at the sectoral level in a group of EU countries. Our main objective is to test at the sectoral level the conclusions of previous aggregate analyses which find that an inverse relationship between trade costs and agglomeration holds in case of the Home Market Effect. Our sectoral focus requires an original testing approach based on the combination of different bootstrap distributions.

Suggested Citation

  • Gianluca Cafiso, 2012. "Sectoral Trade Freeness and Agglomeration in the EU: An Empirical Test Strategy," CESifo Working Paper Series 4000, CESifo.
    • Handle: RePEc:ces:ceswps:_4000
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    References listed on IDEAS

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    1. Head, Keith & Mayer, Thierry, 2004. "The empirics of agglomeration and trade," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 59, pages 2609-2669, Elsevier.
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    8. BEHRENS, Kristian & LAMORGESE, Andrea R. & OTTAVIANO, Gianmarco I.P. & TABUCHI, Takatoshi, 2005. "Testing the ‘home market effect’ in a multi-country world," LIDAM Discussion Papers CORE 2005055, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    More about this item

    Keywords

    trade freeness; agglomeration of production; home market effect; bootstrap;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration

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