Persistent Uneven Spread of Economic Activities within Developing RIAsCahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) from Université de Lausanne, Faculté des HEC, DEEP Abstract: One of the striking features of many developing Regional Integration Areas (RIAs) is the strong asymmetry between countries. In this paper, we consider a three-country two-sector model in a footloose capital framework. Two of these countries are involved in a regional integration process while the third is left out of the union. They are "port-like" economies where only one region is endowed with international infrastructures, so that imports and exports between trading partners necessarily pass through this transit region. The comparative statics of our model show that better domestic transport infrastructure helps to attract a higher share of footloose activity when trade costs within the RIA are lowered, inducing a persistent uneven spread of the mobile sector between the member countries. If the domestic infrastructure levels of these countries are both raised towards a high-quality level, a convergence process is triggered to the disadvantage of the country left outside the RIA. Keywords: uneven development; regional integration area; convergence (search for similar items in EconPapers) Downloads: (external link) Related works: Access Statistics for this paper More papers in Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) from Université de Lausanne, Faculté des HEC, DEEP |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
Econpapers is hosted by the
Swedish Business School at Örebro University.