Trade openness and city interaction

Mauricio Ramírez Grajeda () and Ian Sheldon

MPRA Paper from University Library of Munich, Germany

Abstract: The New Economic Geography framework supports the idea that economic integration plays an important role in explaining urban concentration. By using Fujita et al. (1999) as a theoretical motivation, and information on the 5 most important cities of 84 countries, we find that the size of main cities declines and the size of secondary cities increases as a result of external trade. Similar results are obtained for cities with a population over a million. However, cities with a large fraction of the urban population grow independently of their position in the urban ranking. The implications for urban planners and development economists is that investment in infrastructure must take place in secondary cities when a country is involved in a process of trade liberalization, especially, those located near ports.

Keywords: New Economic Geography; Trade Openness; Agglomeration and Urban Economics. (search for similar items in EconPapers)
JEL-codes: F12 F15 R12 (search for similar items in EconPapers)
Date: 2009-05-01
New Economics Papers: this item is included in nep-geo, nep-int and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Chapter: Trade Openness and City Interaction (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:18029

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