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1、See discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/270873237Does Economic Globalization Affect Regional Inequality? A Cross-CountryAnalysisArticle in World Dev
2、elopment · December 2013DOI: 10.1016/j.worlddev.2013.07.002CITATIONS42READS5552 authors, including:Some of the authors of this publication are also working on these related projects:How do regional institutions affe
3、ct economic development View projectAndrés Rodríguez-PoseThe London School of Economics and Political Science311 PUBLICATIONS 8,802 CITATIONS SEE PROFILEAll content following this page was uploaded by Andr&
4、#233;s Rodríguez-Pose on 07 September 2017.The user has requested enhancement of the downloaded file.2. ECONOMIC GLOBALIZATION AND SPATIAL INEQUALITY IN THE LITERATUREAlthough globalization and spatial inequalities
5、on their own have attracted considerable attention in recent years, their relationship has, somewhat surprisingly, been overlooked by the scholarly literature (Bru ¨lhart, 2011; Rodr? ´guez-Pose, 2012). This co
6、ntrasts with the large interest accorded over the last two decades to the impact of economic integration on growth (e.g., Alcala ´ Alesina, Spolaore,Frankel Dreher Milanovic, 2005a; Wade, 2004). The situation, ho
7、wever, has begun to change recently, coinciding with the resurgence of interest in economic geography and with the improvements in the availability and quality of regional data.From a theoretical perspective, the develop
8、ment of the so- called “new economic geography” (NEG) has played a crucial role in pushing forward the early interest of some neoclassical studies (e.g., Henderson, 1982; Rauch, 1991) on the analysis of the consequences
9、of rising trade—as trade with the rest of the world became less costly—on the spatial distribution of eco- nomic activity within a country. While early urban systems models were based on the assumption of perfectly compe
10、titive markets with exogenous scale economies at the regional level, and lacked a welfare-relevant dimension of spatial inequality (Bru ¨lhart, 2011), the emergence of the NEG school has al- lowed for monopolistical
11、ly competitive markets and endoge- nous regional scale economies. 1 Within this framework, the NEG has conceptualized the effect of economic integration on the spatial distribution of income in terms of changes in cross-
12、border access to markets that affect the interactions be- tween agglomeration and dispersion forces.The NEG has provided a framework for determining the dynamics of the location of economic activity across regions within
13、 a country, which has led to the publication—beginning with the seminal paper by Krugman (1991)—of numerous the- oretical models concerned with the spatial implications of trade integration over the last 20 years. These
14、models tend to employ different sets of assumptions and functional forms, which has resulted, however, in contradictory and ambiguous conclusions. While some of the proposed models (e.g., Alonso- Villar, 2001; Behrens, G
15、aigne, Ottaviano, Krugman Monfort Paluzie, 2001) point toward a link between trade integration and inter- nal agglomeration, which gives rise to greater regional dispar- ities. It is difficult to determine a priori wh
16、ich type of model provides a better representation of reality (Bru ¨lhart, 2011). Empirical research is therefore key to shedding light on the spatial implications of economic integration. Yet, the number of empiric
17、al analyses on the topic so far is relatively limited.Most existing empirical analyses on this issue tend to be based on single-country case studies, reflecting the scarcity and limited reliability of regional comparable
18、 data sets across countries. In particular, the literature has paid special atten- tion to the experience of two emerging countries: China and Mexico. The results of analyses dealing with China (e.g., Jian, Sachs, Kanbu
19、r Zhang Jordaan, 2008; Sa ´nchez-Reaza & Rodr? ´guez-Pose, 2002) also tend to highlight a positive association between the evolution of regional inequality and the rise in the degree of trade open- ness.
20、The integration of Mexico in the General Agreement on Tariff and Trade (GATT) and the North American Free Trade Agreement (NAFTA) contributed to the development of states bordering the US and to further industrialization
21、 in and around the former economic hubs of the Centre of the country, while the more impoverished South languished be- hind.In stark contrast to the number of single-country case stud- ies, there are few cross-country an
22、alyses to date addressing the spatial implications of a greater degree of economic integra- tion. In a recent review of this literature, Bru ¨lhart (2011) only identifies 11 cross-country studies exploring this issu
23、e. The majority of these papers use an indicator of urban primacy as dependent variable, which does not allow to properly dis- cern the extent to which changes in trade patterns influence re- gional convergence or diverg
24、ence trends. Research byRodr? ´guez-Pose and Gill (2006) and Rodr? ´guez-Pose (2012), by contrast, tackles the spatial consequences of trade openness head on. These analyses use different measures of spatial in
25、equality in order to quantify the relevance of regional dis- parities within the sample countries. Rodr? ´guez-Pose and Gill (2006) focus their attention on eight countries—Brazil, China, Germany, India, Italy, Mexi
26、co, Spain, and the United States—over various time spans during 1970–2000. The authors conclude that there is no clear-cut connection between changes in the degree of trade openness and regional inequal- ity, although th
27、e association seems to be stronger when sec- toral shifts in trade composition are considered. Rodr? ´guez- Pose (2012), using a range of panel data techniques, examines this issue in a sample of 15 developed and 13
28、 emerging coun- tries throughout the period 1970–2005. His results show that trade openness has a positive and statistically significant asso- ciation with regional inequality in combination with certain country-specific
29、 conditions. Rodr? ´guez-Pose (2012) also finds that the spatial impact of international trade is greater in low- and middle-income countries than in high-income coun- tries.A limited number of additional studies no
30、t dealing specifi- cally with the spatial implications of trade liberalizations in- clude a measure of the degree of trade openness as a control variable in cross-country regressions whose dependent vari- able is an indi
31、cator of within-country spatial inequality. The results obtained by these studies are not conclusive. Some pa- pers report that greater trade openness leads to higher levels of regional disparities (Rodr? ´guez-Pose
32、 & Ezcurra, 2010), while others find that the relationship is not statistically significant (Milanovic, 2005b), or depends ultimately on the countries in- cluded in the sample (Petrakos, Rodr? ´guez-Pose, &
33、Rovolis, 2005).One important characteristic of all the above-mentioned cross-country analyses is that they use different measures of trade openness to examine the spatial consequences of eco- nomic globalization. While t
34、his approach is undoubtedly use- ful in order to investigate the impact on regional disparities of changes in trade patterns, it neglects the role played by other potentially important dimensions of economic integration.
35、 Trade is not the only factor driving economic globalization. As has been noted by the literature on the death of distance, in a more integrated world firms and companies are becoming much more mobile and pursuing integr
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