Working Paper: CEPR ID: DP5574
Authors: Henry G. Overman; L. Alan Winters
Abstract: This paper combines establishment level production data with international trade data by port to examine the impact of accession to the EEC on the spatial distribution of UK manufacturing. We use this data to test the predictions from economic geography models of how external trade affects the spatial distribution of employment. Our results suggest that accession changed the country-composition of UK trade and via the port-composition induced an exogenous shock to the economic environment in different locations. In line with theory, we find that better access to export markets and intermediate goods increase employment while increased import competition decreases employment.
Keywords: Economic Geography; EEC; UK Manufacturing
JEL Codes: F14; F15; R12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| EEC accession (F15) | improved access to export markets (F10) |
| improved access to export markets (F10) | increase in employment (J68) |
| EEC accession (F15) | increased import competition (F69) |
| increased import competition (F69) | decrease in employment (J63) |
| EEC accession (F15) | exogenous variation in access variables affecting employment (J68) |
| exogenous variation in access variables affecting employment (J68) | employment levels (J23) |