Economic integration and efficiency seeking FDI: a three region model

Natalia Vechiu ()
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Natalia Vechiu: UPPA - Université de Pau et des Pays de l'Adour

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Abstract: This paper discusses the evolution of the supply chain and welfare under economic integration in a three-region framework (one developed and two developing regions), with each region at a different stage of development. Economic integration is measured by the reduction of inter-regional trade costs and by the reduction of communication costs between headquarters and plants of multinational firms. We showed that the increasing number of emerging and developing economies participating in the World economy and their relative competitiveness may considerably change the classic outcomes of the new economic geography. More countries (developed, emerging or developing) may enjoy industry accumulation (or FDIs increase), a periphery being able to become a centre.

Date: 2010
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Published in Revue d'économie régionale et urbaine, 2010

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05610172

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