Resource title

Trade and the effect of public investment on regional inequalities in heterogeneously integrated areas

Resource image

image for OpenScout resource :: Trade and the effect of public investment on regional inequalities in heterogeneously integrated areas

Resource description

Regional integration, it is argued, challenges the distribution of economic activity among regions. However, the government role in shifting the patterns of regional inequalities is still under debate and has received small comprehensive empirical evidence. This paper examines the hypothesis of trade as channelling public investment and, thus, perpetuating regional inequalities. We argue that the interplay of public and private investment plays a key role in stimulating trade and economic activity. To avoid problems of cross-country heterogeneity and comparability this study examines data for two countries; Mexico and Spain, both followers of trade integration arrangements. Findings indicate that regional inequalities in Mexico are significantly explained by differences in export capacity serving to boost private investment whereas inequalities in Spain are appreciably driven by previous endowments and private capital formation.

Resource author

Resource publisher

Resource publish date

Resource language

en

Resource content type

Resource resource URL

http://eprints.lse.ac.uk/19410/

Resource license