Affiliation:
1. Booth School of Business, University of Chicago 5807 South Woodlawn Avenue, Chicago, IL 60637(e-mail: )
2. Department of Economics, University of California Los Angeles, 8283 Bunche Hall, Los Angeles, CA 90095 (e-mail: )
Abstract
We introduce an internal geography to the canonical model of international trade driven by comparative advantages to study the regional effects of external economic integration. The model features a dual-economy structure, in which locations near international gates specialize in export-oriented sectors while more distant locations do not trade with the rest of the world. The theory rationalizes patterns of specialization, employment, and relative incomes observed in developing countries that opened up to trade. We find regional specialization patterns consistent with the model in industry-level data from Chinese prefectures. (JEL F11, O18, P23, P25, P33, R12, R32)
Publisher
American Economic Association
Subject
General Economics, Econometrics and Finance
Cited by
91 articles.
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