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Preferential trading arrangements and industrial location

Puga, D and Venables, Tony (1995) Preferential trading arrangements and industrial location. CEPR Discussion Paper, 1309. Centre for Economic Policy Research, London.

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Abstract

This paper considers the location effects of geographically-discriminatory trade policy. A preferential move towards a customs union attracts industry to the integrating countries. When internal barriers fall below some critical level, input-output links between imperfectly competitive firms lead some customs union countries to gain industry at the expense of others. Closer integration can bring converging industrial development to the union. A hub-and-spoke arrangement favours location in the hub, with better reciprocal access to spoke nations than to each other. Further liberalization induces agglomeration in the hub and may trigger disparities between the spokes.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.cepr.org/pubs/new-dps/dp_papers.htm
Additional Information: © 1995 The Author
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Journal of Economic Literature Classification System: F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies
F - International Economics > F1 - Trade > F15 - Economic Integration
R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 1309
Date Deposited: 27 Apr 2007
URL: http://eprints.lse.ac.uk/2146/

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