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Trade and Regional Inequality / Rodriguez-Pose, Andres
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Rodriguez-Pose, Andres
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Agriculture.
- Comparative advantage.
- Comparative advantages.
- Competitiveness.
- Dynamic analysis.
- Econometric analysis.
- Economic geography.
- Economic growth.
- Economic integration.
- Economic Theory & Research.
- Emerging Markets.
- Exports.
- Free Trade.
- GDP.
- GDP per capita.
- Human capital.
- Income.
- International Economics and Trade.
- International trade.
- Macroeconomic policies.
- Macroeconomics and Economic Growth.
- Middle income countries.
- Private Sector Development.
- Purchasing power.
- Real GDP.
- Regional Economic Development.
- Rent seeking.
- Trade Policy.
- Local Subjects:
- Agriculture.
- Comparative advantage.
- Comparative advantages.
- Competitiveness.
- Dynamic analysis.
- Econometric analysis.
- Economic geography.
- Economic growth.
- Economic integration.
- Economic Theory & Research.
- Emerging Markets.
- Exports.
- Free Trade.
- GDP.
- GDP per capita.
- Human capital.
- Income.
- International Economics and Trade.
- International trade.
- Macroeconomic policies.
- Macroeconomics and Economic Growth.
- Middle income countries.
- Private Sector Development.
- Purchasing power.
- Real GDP.
- Regional Economic Development.
- Rent seeking.
- Trade Policy.
- Physical Description:
- 1 online resource (41 pages)
- Place of Publication:
- Washington, D.C., The World Bank, 2010
- System Details:
- data file
- Summary:
- This paper examines the relationship between openness and within-country regional inequality across 28 countries over the period 1975-2005, paying special attention to whether increases in global trade affect the developed and developing world differently. Using a combination of static and dynamic panel data analysis, we find that while increases in trade per se do not lead to greater territorial polarization, in combination with certain country-specific conditions, trade has a positive and significant association with regional inequality. In particular, states with higher inter-regional differences in sector endowments, a lower share of government expenditure, and a combination of high internal transaction costs with a higher degree of coincidence between the regional income distribution and regional foreign market access positions have experienced the greatest rise in territorial inequality when exposed to greater trade flows. This means that changes in trade regimes have had a more polarizing effect in low and middle-income countries, whose structural features tend to potentiate the trade effect and whose levels of internal spatial inequality are, on average, significantly higher than in high-income countries.
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