Title
Globalization, Interregional and International Inequalities
Abstract
This paper examines interregional and international inequalities in a setup of
two countries and four regions. Different from the existing literature, countries and
regions are not required to be symmetric in size. Capital but not labor is mobile
across regions and countries. We find that the interregional and international inequalities
are closely related to globalization and the efficiency of local governance.
In other words, they are jointly determined by the domestic transport costs (e.g., infrastructure,
administrative barriers, etc) in the two countries and the international
trade cost. Particularly, the interregional inequality may be either a monotonically
increasing or an inverted U-curve function of its own domestic transport costs. Also,
the interregional inequality decreases with the national manufacturing share. These
results shed light on the so-called "deindustrialization" phenomenon.
Dao-Zhi ZENG
Graduate School of Management, Kagawa University
Laixun ZHAO
Research Institute for Economics and Business Administration
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501
Japan
Phone: (81) 78 803 7036
Fax: (81) 78 803 7059