DP5574 Trade and Economic Geography: The Impact of EEC Accession on the UK

Author(s): Henry G Overman, L. Alan Winters
Publication Date: March 2006
Keyword(s): economic geography, EEC, UK manufacturing
JEL(s): F14, F15, R12
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=5574

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.