Trading with richer and poorer countries: trade integration and regional inequality in Greece

Andrés Rodríguez-Pose and Alexandra Sotiriou ()
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Alexandra Sotiriou: London School of Economics

The Annals of Regional Science, 2021, vol. 67, issue 3, No 6, 697-725

Abstract: Abstract This paper examines the link between increased trade and regional GDP growth across the regional income distribution in Greece during the post-EMU period (2000–2013). By means of quantile regression techniques, panel fixed effects and system generalized method of moments (GMM), we disentangle the effects of EU trade—trading with generally richer countries—versus global trade—in the case of Greece, mostly trading with poorer countries—at several points of the regional income distribution to identify differences in trade elasticities. The analysis finds that the impact of EU trade is highly heterogeneous and mainly affects negatively the economy of the richer regions in Greece. In contrast, the effects of EU trade display insignificant results for the lower-income regions, attributed to the absence of direct substitution effects.

Keywords: Trade; Regional inequality; Economic growth; Greece (search for similar items in EconPapers)
JEL-codes: F13 O24 R11 R12 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s00168-021-01062-1

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