Journal of Economic Geography Advance Access originally published online on November 22, 2006
Journal of Economic Geography 2007 7(1):93-111; doi:10.1093/jeg/lbl022
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Economic integration and the diversification of regional exports: evidence from the CanadianU.S. Free Trade Agreement

* University of Ottawa, Canada. email < scoulomb{at}uottawa.ca>
Corresponding author: University of Luxembourg, Luxembourg, University of Brussels, Belgium and CES-ifo. email < michel.beine{at}uni.lu>
We investigate the impact of CanadaU.S. trade integration on the degree of export diversification of the Canadian regions. Trade integration is captured through the decrease of trade-weighted tariffs that were boosted by implementation of the CanadianU.S. Free Trade Agreement. We found strong evidence to support integration's long-run impact on the patterns of absolute exports diversification. Significantly, this new finding remains robust to the exclusion of the primary sectors and to the potential presence of unit root in the data. Our results lead us to support a positive long-run relationship between trade integration and export diversification.
Keywords: Regional specialization, Free Trade Agreement, core-periphery structure, panel data,
JEL classifications: F14, F15, R12
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