Trade Liberalization and the Modern Metropolis
University of Nottingham
March 8, 2010
Nottingham University Business School Research Paper No. 2010/02
What is the impact of international trade on cities and rural areas within a country? Existing studies on this topic are based on new economic geography models, which focus on the effect of international trade on the change in the balance between agglomeration and dispersion forces of the manufacturing firms. Recent studies, however, suggest that large cities today can be characterized as specializing in providing business services to host corporate headquarters, rather than as agglomeration of manufacturing. This paper tries to answer the same question by modelling a modern city that provides business services to host corporate headquarters, and argues that the city is likely to grow larger with trade liberalization.
Number of Pages in PDF File: 22
Keywords: Trade liberalization, city, spatial organization of firms
JEL Classification: F12, R12working papers series
Date posted: March 10, 2010
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