Economic geography and international inequality

Stephen Redding, Anthony J. Venables

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710 Citations (Scopus)

Abstract

This paper estimates a structural model of economic geography using cross-country data on per capita income, bilateral trade, and the relative price of manufacturing goods. We provide evidence that the geography of access to markets and sources of supply is statistically significant and quantitatively important in explaining cross-country variation in per capita income. This finding is robust to controlling for a wide range of considerations, including other economic, geographical, social, and institutional characteristics. Geography is found to matter through the mechanisms emphasized by the theory, and the estimated coefficients are consistent with plausible values for the model's structural parameters.

Original languageEnglish
Pages (from-to)53-82
Number of pages30
JournalJournal of International Economics
Volume62
Issue number1
DOIs
Publication statusPublished - Jan 2004
Externally publishedYes

Keywords

  • Economic development
  • Economic geography
  • International trade

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