REGIONAL CONTEXT AND GLOBAL TRADE
Professor, Sciences Po, LSE, UCLA
This version: July 29, 2008
Economic Geography, January 2009
How should we think of the role of regions in relationship to the global economy?
Theory has surprising gaps when it comes to building a unified vision of these two scales
of development. Two contributions to such a vision are proposed in this paper.
relationship between geographical concentration and the regional economic specialization
it underpins, and globalization,
should be theorized as a dynamic process.
location and trade theory is not adequate for this task;
instead, the dynamical relationship
can be captured through growth theory. But this in turn requires correcting growth theory
to separate its local and its global components, respectively Marshall-Arrow from Romer
Second, we consider the missing element in all theories of geographical
concentration and locally-specialized development, an element labeled “context” here.
theory of context in turn raises important new questions about the dynamic welfare and
developmental effects of contemporary processes of fragmenting and re-locating
production at a global scale.
JEL: D62, F12, F15, R12
An earlier version of this paper was delivered as the Roepke Memorial Lecture at the AAG Annual
Meeting in Boston, March 2008, as well as at the DRUID Summer Conference in Copenhagen (June 2008).
This version benefited from the comments made at both those meetings.
I would particularly like to thank
Gilles Duranton, Anders Malmberg, Jim Love and Stefano Breschi for acting as discussant on the paper,
and Peter Maskell for including it on the DRUID program.
Yuko Aoyama encouraged me to prepare this
paper for publication, and the editors of
provided many useful points for clarifying
Markus Perkmann and Ewald Engelen provided me detailed criticisms that helped in
revising the paper, and participants at the Society for Advancement of Socio-Economics in San José, Costa
Rica (July 2008) offered a number of stimulating new points that also helped in restructuring the initial
Any errors are the sole responsibility of the author.