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Effects of commercial and technological integrations on regional agglomeration and welfare outcomes : the case of the European Union

Abstract : Broadly, the economic literature supports the idea that deepening regional economic integration benefits all trade partners. However, opposite insights have shade light on the increasing needs for a deeper analysis of the heterogenous effects of economic integration processes upon territories. In particular, areas of economic integration such as the European Union have kept on enlarging while some elements tend to emphasize unequal gains from one region to another. The object of this dissertation has been to bring in new elements on these issues by discriminating between two different forms of integration, namely, distinguishing a commercial form of integration from a technological form of integration. We investigate the respective impacts of both types of integration on agglomeration outcomes and welfare distribution across regions. The first chapter lays the problem at the core of this work looking at the entrenchment of spatial inequalities. Using statistical methods from the spatial analysis toolbox, it brings to light diverging dynamics between regions of European Union (EU-28) member states over the period 2000-2016. As a first working hypothesis, we aimed also at evaluating the impact of both commercial and technological forms of integration on regional welfares. We exploit the autocorrelation phenomenon conveyed by those networks to quantify their explanatory share regarding regional GDPs. Our first results fail at enhancing a powerful relationship linking those elements but interestingly we emphasize a negative correlation between both forms of integration over space. The second chapter investigates the origins of the growth slowdown for regions from the Old Europe that particularly suffered during the last phases of EU integration. In this chapter we make use of recent methods using enhancements at the frontier between Common Correlated Effects models (that root back to Common Factors models) and spatial econometrics. Our results give credit to the hypothesis of over-investment in R&D across those territories. Recent theoretical elements support our results in showing that over-investment in R&D could pair with under-growth paths that is lower than optimal growth levels. The third chapter reviews the literature that study the determinants of the gains from trade. The New Economic Geography (NEG) models first designated the lowering of trade costs as a major determinant to agglomeration processes and welfare outcomes. The next generation of New Economic Geography and Growth (NEGG) models introduced the distinction between commercial and technological integrations and allowed to consider impacts that would differ. Recent theoretical advances on this front reached testable implications regarding the relationship between various forms of integration and agglomeration outcomes. Lastly, a new generation of Quantitative Spatial models (QSM) emphasizes the importance of labor mobility, besides capital mobility, as a vector of technological integration between territories and brings in new tools to quantify the spatially uneven impact of economic integration on welfare. The last chapter pushes further some testable implications of NEGG models. It specifies a relationship between the evolution of agglomeration processes of economic activities across regions and the commercial and technological ties that link regions to their neighbors in a common integration zone. The relationship is tested on regions belonging to the EU-28 over the recent period. We take care of endogeneity issues using tools also combining requirements on the control of spatial autocorrelation issues and nonparametric features. Our main results go along the theoretical statement that oppose the effect of commercial integration that favor spatial agglomeration to the effect of technological integration that temper agglomeration dynamics.
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Submitted on : Tuesday, January 19, 2021 - 4:38:08 PM
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Lisa Menez. Effects of commercial and technological integrations on regional agglomeration and welfare outcomes : the case of the European Union. Economics and Finance. Université Côte d'Azur, 2020. English. ⟨NNT : 2020COAZ0008⟩. ⟨tel-03115457⟩



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