Internal Geography, International Trade, and Regional Specialization

A. Kerem Coşar and Pablo Fajgelbaum ()

No 19697, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We introduce an internal geography to the canonical model of international trade driven by comparative advantages to study the regional effects of external economic integration. The model features a dual-economy structure, in which locations near international gates specialize in export-oriented sectors while more distant locations do not trade with the rest of the world. The theory rationalizes patterns of specialization, employment, and relative incomes observed in developing countries that opened up to trade. We find regional specialization patterns consistent with the model in industry-level data from Chinese prefectures.

JEL-codes: F11 R12 (search for similar items in EconPapers)
Date: 2013-12
New Economics Papers: this item is included in nep-geo, nep-int, nep-tra and nep-ure
Note: ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

Published as Internal Geography, International Trade, and Regional Specialization A. Kerem Coşar Pablo D. Fajgelbaum AMERICAN ECONOMIC JOURNAL: MICROECONOMICS VOL. 8, NO. 1, FEBRUARY 2016 (pp. 24-56)

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Journal Article: Internal Geography, International Trade, and Regional Specialization (2016)
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