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Trading with richer and poorer countries: trade integration and regional inequality in Greece
Andrés Rodríguez-Pose1, Alexandra Sotiriou1
1Cañada Blanch Centre and Department of Geography and Environment, London School of Economics, Houghton Street, London, WC2A 2AE UK.
Abstract:
This paper examines the link between increased trade and regional GDP growth across the regional income distribution in Greece during the post-EMU period (2000-2013). By means of quantile regression techniques, panel fixed effects and system generalized method of moments (GMM), we disentangle the effects of EU trade-trading with generally richer countries-versus global trade-in the case of Greece, mostly trading with poorer countries-at several points of the regional income distribution to identify differences in trade elasticities. The analysis finds that the impact of EU trade is highly heterogeneous and mainly affects negatively the economy of the richer regions in Greece. In contrast, the effects of EU trade display insignificant results for the lower-income regions, attributed to the absence of direct substitution effects.
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