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Regional integration and its spatial effects within a member country

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  • Granato, María Florencia

Abstract

This paper studies the impact of regional integration on the economic geography of an interior region, for instance a member country. It extends a simple new economic geography model in which differentiated goods can be exchanged both nationally and internationally but at different positive costs. Both types of costs affect agglomeration and dispersion forces; as a consequence, regional integration modifies the incentive for firms to spatially concentrate. The results obtained suggest that heterogeneity between domestic locations, in terms of access to the preferential partner and in terms of market size play a major role in shaping industrial location inside the member country. If two domestic locations are equidistant from the preferential partner, regional integration tends to foster spatial concentration in the biggest location. When one of the regions has an advantage in terms of access to the partner's market, preferential trade liberalisation generally favours it, unless competition from abroad is too high.

Suggested Citation

  • 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).
    • Handle: RePEc:iob:wpaper:2005002
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    References listed on IDEAS

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    1. Olga Alonso-Villar, 2001. "Large Metropolises in the Third World: An Explanation," Urban Studies, Urban Studies Journal Limited, vol. 38(8), pages 1359-1371, July.
    2. 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.
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    1. Maria Florencia Granato, 2011. "REGIONAL NEW ECONOMIC GEOGRAPHY (refereed paper)," ERSA conference papers ersa10p747, European Regional Science Association.

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