Economic Integration and Regional Industrial Specialization: Evidence from the Canadian-U.S. FTA Experience

Michel A. R. Beine, Serge Coulombe
2004 Social Science Research Network  
We investigate the impact of Canada-U.S. trade integration on the degree of industrial specialization of the Canadian regions. Trade integration is captured through the decrease of trade-weighted tariffs that were boosted by the implementation of the Canadian-U.S. Free Trade Agreement. We found strong evidence to support integration's long-run impact on the patterns of absolute industrial diversification. Significantly, this new finding remains robust to the exclusion of the primary sectors and
more » ... to the potential presence of unit root in the data. Our results lead us to support a positive long-run relationship between trade integration and industrial diversification.
doi:10.2139/ssrn.588223 fatcat:4e62fmest5fczn3xylfcbjbewm