Scandinavian Working Papers in Economics

Research Papers in Economics,
Stockholm University, Department of Economics

No 2004:2: Does a Wait and See Approach to European Integration Shelter the Industrial Base of Small Countries?

Rikard Forslid ()
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Rikard Forslid: Dept. of Economics, Stockholm University, Postal: Department of Economics, Stockholm University, S-106 91 Stockholm, Sweden

Abstract: This paper compares the effect of economic integration on industry location for a small country that goes ahead with an integration process, such as the European, and a country adopting a wait and see strategy. Theoretical results, derived from a three-region new economic geography model, are compared to stylised facts on European manufacturing production. The result is that further integration could strengthen the industrial base of small countries that go ahead with integration.

Keywords: Agglomeration; economic integration; multiregion-model

JEL-codes: F12; F15; F21; R12

16 pages, March 22, 2004

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