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Abstract International integration and regional integration have different effects on a country . Increased international integration initially enlarges regional gap in terms of industrial size , but then narrows it , which means that any level of international integration benefits balanced development between regions .By contrast ,increased regional integration attracts more economic activities to that country , but leads to larger regional gap . In terms of welfare effects , when a country gradually increases its international integration ,the welfare level of its consumers firstly rises ,but then drops , while foreign consumers'welfare level is always on the rise . When a country upgrades regional integration , its own consumers'welfare always increases , while the opposite is true for foreign consumers .
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Received: 23 April 2010
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