Spatial inequality between developed and developing economies

Authors


  • Most of this joint research was conducted when Lili Tan visited Tohoku University. We particularly thank two anonymous referees, Adina Ardelean, Masahisa Fujita, Hiroshi Goto, Hiroyuki Mizuta, Jota Ishikawa, Pierre Picard, Yasuhiro Sato, Takatoshi Tabuchi, Hajime Takatsuka, Jacques Thisse for providing exceptionally detailed and helpful comments to improve the paper. Dao-Zhi Zeng acknowledges financial support from the Japanese Ministry of Education, Culture, Sports, Science and Technology and Japan Society for the Promotion of Science through Grants-in-Aid for Scientific Research 22330073, 24243036, 24330072. Both authors are grateful to the Y. C. Tang disciplinary development fund and the Hengyi Foundation of Zhejiang University in China and support from the Research Institute of Economy, Trade and Industry of Japan.

Abstract

Bearing in mind that developing countries have less capital and less advanced technologies, this paper theoretically investigates the joint impact of two first-nature forces, Ricardian and Heckscher-Ohlin advantages and the second-nature force on spatial income inequality. We establish a new economic geography model without a traditional sector so that the wages are not equalized. By combining these three kinds of trade forces, we show how spatial income inequality changes with economic integration. Four evolution patterns are obtained which are consistent with diverse empirical results in the literature.

Resumen

Teniendo en cuenta que los países en desarrollo poseen menos capital y tecnologías menos avanzadas, este artículo investiga teóricamente el efecto conjunto de dos fuerzas de primera naturaleza, las ventajas ricardiana y de Heckscher-Ohlin y la fuerza de segunda naturaleza sobre la desigualdad espacial de ingresos. Establecemos un modelo de nueva geografía económica sin un sector tradicional, de modo que los salarios no se igualan. Mediante la combinación de estos tres tipos de fuerzas comerciales, se muestra cómo la desigualdad espacial de ingresos cambia con la integración económica. Se obtienen cuatro patrones de evolución, en consonancia con diferentes resultados empíricos en la literatura.

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