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Journal of Economic Integration 2017 June;32(2) :358-399.
DOI: https://doi.org/10.11130/jei.2017.32.2.358
Intra-National Trade as Channels of Spillovers in Developing Countries
Yong He 
CERDI-CNRS, Université Clermont-Auvergne, Clermont-Ferrand, France
Corresponding Author: Yong He ,Tel: +33473177500, Fax: +33473177428, Email: yong.he@uca.fr
Copyright ©2017 Journal of Economic Integration
ABSTRACT
We developed a model to explore the comparative advantage based intra-national trade in developing countries, as a contrast to models driven by increasing returns and agglomeration that prevail in the developed world. The model incorporates technological spillovers and trade. The findings suggest that the intra-national trade share of a region is inversely proportional to its technological level, and that economic growth diffuses along the intra-national trade network from the developed country, through the advanced regions of the developing country, into its less developed regions. Internal trade costs exert a multiplied hindering effect, stronger than that of border barriers, on national growth. The statistics derived from China’s 2007 provincial input-output tables provide evidence in favor of the main theoretical findings.

JEL Classification
F1: Trade
O1: Economic Development
O3: Technological Change; Research and Development; Intellectual Property Rights
O4: Economic Growth and Aggregate Productivity
R1: General Regional Economics
Keywords: Comparative Advantage-based Intra-national Trade | Intra-national Spillovers | Regional Input-output Tables | Regional Disparity | Endogenous Growth Model
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