Abstract
ABSTRACT This study attempts to assess the forces of globalization versus the forces of regionalization on a macro level, rather than the usual micro (firm and industry) one. In order to find out which syndrome (globalization or regionalization) does prevail, this study estimates the effects of both syndromes on economic welfare and their causes, respectively, by borrowing from two theories: the new growth and the gravity. Within this context, globalization is represented by the proxy extra-regional trade (or trade by individual blocs to the rest of the world), whereas regionalization is measured by the proxy intra-trade (or trade within individual blocs). It examines a comprehensive sample of all 32 registered blocs. Findings reveal that, in terms of economic impact, regionalization wins over globalization in affecting regional economic welfare at a ratio of 3 to 2. Additional results show that 28 blocs have a statistically significant and positive impact on regionalization, whereas 19 blocs have a significant and positive one on globalization. The findings of this study tend also to support the “semiglobalization” hypothesis of Ghemawat (2003).
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