Empirical Sudies in Trade, Growth and Integration

Sammanfattning: The present study is composed of a series of six independent yet related articles treating various aspects of international trade and economic growth. In Chapter two the effects of European Integration (EI) on long-run economic growth is studied. Contrary to earlier empirical results long-run effects of EI are identified. As a development Chapter three examines two potential channels linking EI to growth, namely Investment and knowledge spillovers translated into higher Total Factor Productivity (TFP). The results strongly suggest that integrated countries enjoy higher investment ratios and that there is evidence for international technology transfer across integrated countries. In Chapter four we question whether the normalization of the political relations in the Middle Eastern and North African (MENA) region led to increased intra-regional trade. Based on the gravity model predictions of post-normalized intra-MENA trade flows suggest that there is no large overall potential for increased trade within the region or with Europe. The basic conclusion is therefore that the political turmoil has been overrated as far as trade volumes are concerned. Moreover, more trade per se need not contribute to higher welfare gains unless it leads to a more efficient allocation of resources. This issue is treated in Chapter five where a net trade equation is estimated. The results reveal that trade in the MENA region is not determined by comparative costs, technical differences, or scale economies. In other words trade in the region is severely distorted and efforts aiming at increasing trade volumes without simultaneously removing distortions may not be welfare enhancing. In Chapter six the relationship between income distribution and growth is examined. Employing sensitivity analysis and different data sets we find that equality is growth promoting in democracies. However, the level of development has no bearing on the relationship i.e. when equality is growth promoting this is irrespective of the stage of development. The results were mostly sensitive suggesting that they need to be interpreted with caution. In Chapter seven we attempt to explain the phenomenon of expanding urban giants. In particular we test whether trade costs interact with traditional push and pull factors and exacerbate agglomeration. The results suggest mixed support for the traditional push and pull effects. We find that higher trade costs within borders seem to reduce concentration, however no evidence that trade costs across borders encourage concentration is found.