Regional integration and economic development: A theoretical approach

Arbeitspapier

We use a model of combined endogenous growth and economic geography to study the impact of regional economic integration on the member and non-member countries of a regional union. Regional integration affects growth through interregional technology diffusion symbolized by knowledge spillovers generated at home and spreading to the partner countries. Spillovers flow from the leader to the follower. Following integration, the lagging country has access to a bigger stock of knowledge that fosters an increase in its rate of growth and extends the diversity of its products. Trade in goods - or in FDI - and flows of ideas are two faces of the same coin. We show that the progressive decrease in transaction costs through the phasing out of barriers to trade together with product imitation can foster growth and convergence in the member countries. However, in order to avoid eventual trade and investment diversions, the non-member should envisage to join the integrated zone.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SFB/TR 15 Discussion Paper ; No. 20

Classification and Topics

• Classification: Wirtschaft ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Economic Integration ; Economic Growth of Open Economies ; Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure ; Innovation; Research and Development; Technological Change; Intellectual Property Rights: General ; One, Two, and Multisector Growth Models ; Regional Economic Activity: Growth, Development, Environmental Issues, and Changes ; Size and Spatial Distributions of Regional Economic Activity ; General Equilibrium and Welfare Economic Analysis of Regional Economies
• Subject: regional economic integration ; endogenous growth ; economic geography

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dion, David-Pascal
• Event: Veröffentlichung
• (who): Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
• (where): München
• (when): 2004

Further information

• DOI: doi:10.5282/ubm/epub.13528
• Handle: http://hdl.handle.net/10419/94049
• URN: urn:nbn:de:bvb:19-epub-13528-2
• Last update: 10.03.2025, 11:44 AM CET