Trade policies, concentration, growth and welfare Gonzalez-Val, Rafael; Lanaspa, Luis; Pueyo, Fernando

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Gonzalez-Val, Rafael ; Lanaspa, Luis ; Pueyo, Fernando
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Economic Modelling
International economic relations -- Growth; International economic relations -- Analysis; International economic relations
To link to full-text access for this article, visit this link: Byline: Rafael Gonzalez-Val, Luis Lanaspa, Fernando Pueyo Keywords: Trade integration; Industrial location; Growth; Welfare Abstract: The aim of this paper is to analyse, through a theoretical model, the effects that the trade integration of two countries may have on industrial location, growth and welfare. The conclusions reached finally depend both on whether the import or the export costs are affected by the trade policies on which the integration process is based and on whether the rich or the poor country introduces them. In general, when integration leads to an increase of industrial concentration in the rich country, the growth rate increases and welfare improves in both countries. If integration means that industry moves to the poor country, the growth rate decreases; in spite of this, in this case the poor country can also improve its welfare. Author Affiliation: Department of Economic Analysis, Universidad de Zaragoza, Gran Via, 2, 50005 Zaragoza, Spain Article History: Accepted 2 July 2009 Article Note: (footnote) [star] The authors would like to thank the Spanish Ministerio de Educacion y Ciencia (SEJ2006-04893/ECON and SEJ2006-14397/ECON projects and AP2005-0168 grant from FPU programme), the DGA (ADETRE research group) and FEDER for their financial support. Earlier versions of this paper have been presented at the IV Workshop in Economic Geography (Castellon, 2006), at the XXXII Symposium of Economic Analysis (Granada, 2007), at the XXXIV Reunion de Estudios Regionales (Baeza, 2008), and at the XVI Symposium on Public Economics (Granada, 2009), with all the comments made by the participants being highly appreciated.
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