 Trade-in-task and regional income inequalitiesRoberta Capello, Damares Lopes Afonso and Giovanni Perucca International Economics, 2025, vol. 181, issue C Abstract: Adjustment mechanisms that restore equilibrium in international trade do not work at subnational level. For this reason, regions do not compete on the basis of comparative advantages. In this paper such a conceptual perspective is inserted in the Grossman and Rossi-Hansberg model (2008) to highlight the heterogeneous income distribution of the effects of trade-in-task among regions within a country. Conceptually extended also to receiving countries, the theoretical model is empirically verified for both offshoring and receiving European economies. Our results show that in offshoring countries increasing trade-in-task triggers intra-country regional income inequalities, thus promoting regional income divergence. Such result suggests the importance of redistributive regional policies. The opposite holds for receiving countries, where further trade integration is likely to boost processes of intra-country regional income convergence, suggesting that no normative actions mitigating inequality increases are required. Keywords: Trade-in-tasl production; Regional income distribution (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:inteco:v:181:y:2025:i:c:s2110701724000982 DOI: 10.1016/j.inteco.2024.100575 Access Statistics for this article International Economics is currently edited by Valerie Mignon and Marcelo Olarreaga More articles in International Economics from Elsevier |
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