What is the impact of trade liberalization and economic integration on the geographical distribution of economic activities? To address this question the present paper proposes a conceptual framework based on recent developments in the theory of international trade and geographical economics. It then surveys the applied literature to show that the main components and mechanisms of the proposed framework find indeed support in the empirical evidence. Finally, based on this “validation”, it uses the conceptual framework to interpret the evolution of spatial disparities in areas of the world that have been involved in processes of trade liberalization and economic integration.