The Region and Trade

The following sections are included:

• Dedication
• Contents
• Acknowledgments
• Contributors

The following sections are included:

• Preliminaries
• Theory
• Empirics
• Theory and Empirics
• Conclusions
• References

We consider a Southern industry engaged in the production of an experience good whose quality cannot be observed prior to purchase. Consequently, Southern consumers rely on the country-of-origin labels to statistically discriminate between a Northern import and the Southern product. We provide a framework to analyze the formation of such quality perceptions and point out its self-fulfilling nature when consumers' willingness to pay and interact with producers' incentive to determine equilibrium average quality of the Southern product. As a theory of the determination of trade volume, our framework shows that the sign of the income effect of import demand is endogenously determined, depending only on the relative perceived quality of the Northern vis-á vis the Southern product. We also derive conditions under which temporary import restrictions may have a permanent effect on the dynamic path of quality perceptions and thus alleviate the Southern industry from a low quality-trap.

This chapter develops a three country model of constant cost production and trade based on productivity and country size. Trade may be limited to two of the countries assuming that gains from trade are necessary for trade to take place. A small country may produce too little to offer gains from trade to the other two. At the other extreme, a country may be too productive to gain from trade. Regional trade is observed if the countries with similar productivities are located closer together, a testable hypothesis.

This chapter investigates the formation of a multilateral free trade agreement (FTA) through the extension of bilateral FTAs in a third country market model of the Brander and Spencer (1985) type. Two exporting countries are different in their number of domestic firms. The importing country imposes tariff on the imports from the exporting countries. Then, we investigate the possibility of the bilateral FTA in the sense that the importing country agrees to abolish the tariff policy against the country forming the agreement. Our main result is that, in the case where each exporting country adopts a subsidization policy on its domestic firms, it is possible to make a voluntary multilateral FTA by the gradual extension of bilateral FTAs under the assumption that the subsidization policy is also resigned in the country reaching the agreement. However, if there is no subsidization policy in the exporting countries, any bilateral FTA cannot be established voluntarily. Thus, it is impossible to form a multilateral FTA by the gradual extension of bilateral FTA.

After a hiatus of almost 30 years, the publication of the interstate commodity flow data for 1993 afforded the first opportunity to examine the nature and strength of interstate connectivity in the US. While the New Economic Geography has provided new stimulus to understanding the spatial economy, complemented by new developments in trade theory that have highlighted geographical proximity, relatively little attention has been paid to the spatial structure of trade, especially at the inter-regional scale. Using data of 1993, 1997, 2002 and 2007, this paper explores various features of the spatial connectivity of the US states. The initial explorations focus on the concentration of the interstate trade system using simple Gini measures and then exploring the flow patterns with principal component analyses to examine the degree to which states share similar product origins or shipment destinations. Thereafter dyadic factor analysis is used to explore the flow structure for an aggregation of 13 commodities. One of the important findings from the analyses is that the general spatial pattern of interstate trade still reflects a geographical structure based on contiguity, with the notable exception of California.

Two common views are that a country cannot develop without a strong manufacturing base and that trade restrictions are essential to facilitate the development of that strong manufacturing base and thus spur economic growth. We ask …

The following sections are included:

• Introduction
• Overcoming the Lack of Spatial Time Series
• Data Analysis
• Non-Point Source Emissions Associated with Freight Movement
• Conclusions and Continuations
• References
• Appendix

In this chapter, we present the inter-island input–output system for the Azores. It includes the economy of the nine islands of the archipelago, considering 25 different economic activities. The chapter also analyzes the impacts of the main drivers of the islands' economy, incorporating both spillover and feedback effects in the evaluation of the multipliers: (i) dairy and beef exports; (ii) external public support; and (iii) tourism, both from the rest of the country and from abroad. It is shown that: (i) the economic structure of the islands is quite different from each other; (ii) the specific economic base of the islands are also different and, as expected, the biggest islands not only capture an important part of the impact of external pushes done in smaller islands, but also they constitute important drivers of smaller islands.

This study makes use of a unique micro-database on research performed at the European Incoherent Scatter Scientific Association (EISCAT) radar system to provide some new perspectives on interregional and international knowledge trade as regards theory, empirics and practice. More broadly, the study examines the economic and societal importance of EISCAT in a spatial context from the perspective of inter-regional trade of knowledge. The fundamental research question is whether the establishment of such scientific infrastructure leads to clustering of related activities in proximity to its location or whether they are spread world-wide independently of the location. We aim to illustrate this question with regard to how inter-regional trade in a research-based knowledge system is fashioned. This is also relevant considering the projected investment in a novel EISCAT system, and prior studies emphasizing that highly-skilled professionals are vital in the knowledge-driven economy, influencing the global dynamics of science-based industries and regions.

The New Economic Geography framework supports the idea that international economic integration plays an important role in second nature geography such as the size of cities. By using Fujita et al. (1999) as a theoretical motivation, information on the most important cities of 84 countries from 1970 to 2000, and spatial econometric of secondary cities increase, as a result of more exposure to external trade. Similar outcomes are observed for cities with a population over a million. However, cities that represent a large fraction of the urban population grow independently of their position in the urban ranking. Such results are in general consistent for different definitions of trade openness. Furthermore, an implication of international trade openness is higher levels of internal trade among secondary cities.

We estimate the Anderson and van Wincoop model of trade by using the data on the bilateral export flows from 26 Turkish regions to 180 countries for the years 2002–2010. Regional transportation and communication infrastructure capacity, the positioning of point infrastructure in a region, and geography are explicitly accounted for. Our results highlight that land infrastructure, air transport capacity, and private maritime infrastructure presence, together with the distance of regional economies to exit nodes such as ports and airports, are important determinants of export performance. Based on our preferred regression where multilateral resistance terms are accounted for, we estimate that increases in the current land infrastructure, air transport capacity, and number of private ports of 1% increases exports approximately by 0.38%, 0.14%, and 0.045% respectively.

The following sections are included:

• Introduction
• Data and Methodology
• A Model
• Concluding Remarks
• Acknowledgments
• References

The following section is included:

• Index