Trade, firm selection, and industrial agglomeration

The Impact of International Trade on Guangdong's Industrial Agglomeration

No 1129 February 2012 Agglomeration , Trade and Selection

This paper studies how firm heterogeneity in terms of productivity affects the balance between agglomeration and dispersion forces in the presence of pecuniary externalities through a selection model of monopolistic competition with variable mark-ups. It shows that firm heterogeneity matters. However, whether it shifts the balance from agglomeration to dispersion or the other way round depends ...

Agglomeration and Trade Revisited ∗

The purpose of this article is twofold. First, we present an alternative model of agglomeration and trade that displays the main features of the recent economic geography literature while allowing for the derivation of analytical results by means of simple algebra. Second, we show how this framework can be used to permit (i) a welfare analysis of the agglomeration process, (ii) a fullfledged fo...

Timeliness, Trade and Agglomeration

An important element of the cost of distance is time taken in delivering final and intermediate goods. We argue that time costs are qualitatively different from direct monetary costs such as freight charges. The difference arises because of uncertainty. Unsynchronised deliveries can disrupt production, and delivery time can force producers to order components before demand and cost uncertaintie...

Tourism and Industrial Agglomeration

Tourism generates increased income and employment in host countries and regions which substantially improves local economies. On the other hand, the manufacturing sector remains the most important part in regional and national economies. By explicitly embedding a nontraded good sector into a new economic geography model, we were able to investigate the interdependence between the tourism sector...