Three essays on geographic consequences of trade openness

by 1970- Ramirez Grajeda, Mauricio

This dissertation is divided into three chapters, which can be read separately. In chapter 2, I investigate the effects of trade openness on the size of the most important cities for 84 countries after controlling for political, geographic and economic factors. I find that the impact is negative on main cities and positive on secondary cities. In chapter 3, I test the bell-shaped relationship between industrial gap and trade costs by partially following Head and Mayer’s (2003) empirical strategy, who confront estimates of trade openness and the range in which agglomeration theoretically takes place. The main result is that concentration of both employment and production may arise if a pair of countries is involved in a process of trade liberalization. In chapter 4, I assess the impact of international trade openness on urban structure in the presence of taste heterogeneity and amenities. I find that taste heterogeneity implies that city size is equal or below the levels featured by Fujita et al. (1999). Furthermore, if amenity differentials exist regardless of trade openness, then a unique equilibrium can be reached. ii A mi mom, Silvia Henny. A mi hermana, Sylvana San. A mi abuela Coti.† A mi tía Gloria. † A Cachita. † iii