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Competitiveness and interregional as well as international trade: The case of Catalonia

Pankaj Ghemawat, Carlos Llano and Francisco Requena Silvente

International Journal of Industrial Organization, 2010, vol. 28, issue 4, 415-422

Abstract: Recent years have seen a surge of interest among industrial organization economists in using data on international trade flows as windows into competitiveness. For countries that are at least mid-sized (e.g., Spain), interregional trade tends to be as large as or significantly larger than international trade. The case of Catalonia, a Spanish region, illustrates how ignoring interregional flows can lead to erroneous inferences about a region's external competitiveness. Accounting for Catalonia's interregional as well as international flows shifts what is generally assessed to be a chronic trade deficit in goods into a surplus and changes diagnoses of which Catalan sectors generate external surpluses and who its key trading partners are. We also use a gravity model approach to estimate international border effects for Catalonia.

Keywords: Regional; competitiveness; Border; effect; Gravity; model; Interregional; trade; Industrial; organization (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (11)

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