Agglomeration and Specialization Patterns when Firms and Workers Are Footloose

In new economic geography models, geographic concentration can't arise because of workers' mobility or vertical linkages between firms. We examine a setup that combines those two approaches in conjunction with local congestion costs. We find that, as trade costs are lowered, the geographic...

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Main Author:	Coulibaly, Souleymane
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Size and Spatial Distributions of Regional Economic Activity R120 Other Production and Pricing Analysis R320
Online Access:	http://hdl.handle.net/10986/5549

id	okr-10986-5549
recordtype	oai_dc
spelling	okr-10986-55492021-04-23T14:02:22Z Agglomeration and Specialization Patterns when Firms and Workers Are Footloose Coulibaly, Souleymane Size and Spatial Distributions of Regional Economic Activity R120 Other Production and Pricing Analysis R320 In new economic geography models, geographic concentration can't arise because of workers' mobility or vertical linkages between firms. We examine a setup that combines those two approaches in conjunction with local congestion costs. We find that, as trade costs are lowered, the geographic concentration of total activity (agglomeration) follows an inverse u-shaped evolution, while the degree of specialization of regions increases. These results shed light on regional development within a country as integration proceeds: when trade costs are high, firms evenly spread between the regions to supply local demand at low costs, hence diversified regions; at intermediate trade costs, we have coexistence of a diversified core and a specialized periphery and at low trade costs, each industry clusters in one region to fully exploit returns to scale externalities. US city centers and non-metropolitan areas during the period 1850-1990 depict such specialization and agglomeration patterns. These results show that a country's effort to improve accessibility across its portfolio of places can favor a win-win regional allocation of firms based on each location's competitive advantage. 2012-03-30T07:33:22Z 2012-03-30T07:33:22Z 2008 Journal Article Journal of Economic Integration 1225651X http://hdl.handle.net/10986/5549 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Size and Spatial Distributions of Regional Economic Activity R120 Other Production and Pricing Analysis R320
spellingShingle	Size and Spatial Distributions of Regional Economic Activity R120 Other Production and Pricing Analysis R320 Coulibaly, Souleymane Agglomeration and Specialization Patterns when Firms and Workers Are Footloose
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	In new economic geography models, geographic concentration can't arise because of workers' mobility or vertical linkages between firms. We examine a setup that combines those two approaches in conjunction with local congestion costs. We find that, as trade costs are lowered, the geographic concentration of total activity (agglomeration) follows an inverse u-shaped evolution, while the degree of specialization of regions increases. These results shed light on regional development within a country as integration proceeds: when trade costs are high, firms evenly spread between the regions to supply local demand at low costs, hence diversified regions; at intermediate trade costs, we have coexistence of a diversified core and a specialized periphery and at low trade costs, each industry clusters in one region to fully exploit returns to scale externalities. US city centers and non-metropolitan areas during the period 1850-1990 depict such specialization and agglomeration patterns. These results show that a country's effort to improve accessibility across its portfolio of places can favor a win-win regional allocation of firms based on each location's competitive advantage.
format	Journal Article
author	Coulibaly, Souleymane
author_facet	Coulibaly, Souleymane
author_sort	Coulibaly, Souleymane
title	Agglomeration and Specialization Patterns when Firms and Workers Are Footloose
title_short	Agglomeration and Specialization Patterns when Firms and Workers Are Footloose
title_full	Agglomeration and Specialization Patterns when Firms and Workers Are Footloose
title_fullStr	Agglomeration and Specialization Patterns when Firms and Workers Are Footloose
title_full_unstemmed	Agglomeration and Specialization Patterns when Firms and Workers Are Footloose
title_sort	agglomeration and specialization patterns when firms and workers are footloose
publishDate	2012
url	http://hdl.handle.net/10986/5549
_version_	1764395448567595008

Agglomeration and Specialization Patterns when Firms and Workers Are Footloose

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