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N° 2009-24 |
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| October 2009 |
| Market Potential and Development |
| Thierry Mayer |
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| This paper provides evidence on the long-term impact of market potential on economic development. It
derives from the New Economic Geography literature a structural estimation where the level of factors’ income of a country is related to its export capacity, labeled Market Access (MA) by Redding and
Venables (2004), or Real Market Potential (RMP) by Head and Mayer (2004). The empirical part
evaluates this market potential for all countries in the world with available trade data over the 1960-2003
period and relates it to income per capita. Overall results show that market potential is a powerful driver
of increases in income per capita. |
Non-technical summary  |
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Résumé
non-technique
en français |
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| Full text |
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| Market potential; economic geography; gravity; development |
Keywords |
| F12 |
JEL classification |
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