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Factor Mobility and the Distribution of Economic Activity in Integrated Economies: Evidence and Implications by Jean-Marie Viaene, Haris Munundar, Harry P. Bowen

Harry P. Bowen (McColl School of Business, Queens University of Charlotte), Haris Munundar (Bank Indonesia, Bureau of Economic Research) and Jean-Marie Viaene (Erasmus University Rotterdam, Tinbergen Institute and CESifo)

Factor Mobility and the Distribution of Economic Activity in Integrated Economies: Evidence and Implications by Jean-Marie Viaene, Haris Munundar, Harry P. Bowenpdf(564 kB) Choose translations of the previous link 

This study examines empirically factor mobility and distribution of economic activity under economic integration, with the result that the benchmark of the equal-share relationship holds strongly for US states and less so for EU countries, but does not hold for Developing Countries or the World.

Recent research (Bowen, Munandar and Viaene, 2005) shows that for a country who is a member of a fully integrated economy, its shares of the integrated economy’s total output and stocks of productive factors (i.e., physical and human capital) will be equal. They label this result the equal-share relationship. 

In this paper, we empirically examine for evidence of the equal-share relationship for alternative economic groups (i.e., US states, EU countries, Developing Countries and a World comprising 55 countries). Our findings indicate that the equal-share relationship holds strongly for US states, less so for EU countries, but does not hold for Developing Countries or the World.

DOI: 10.2765/59175
(European Economy. Economic Papers. 315. April 2008. Brussels. 21pp. Bibliogr. )

KC-AI-08-315-EN-C (online)
ISBN 978-92-79-08240-5 (online)
ISSN 1725-3187

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