EconPapers    
Economics at your fingertips  
 

The global spatial distribution of economic activity:nature, history and the role of trade

J. Vernon Henderson, Tim Squires, Adam Storeygard and David Weil

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We study the distribution of economic activity, as proxied by lights at night, across 250,000 grid cells of average area 560 square kilometres. We first document that nearly half of the variation can be explained by a parsimonious set of physical geography attributes. A full set of country indicators only explains a further 10%. When we divide geographic characteristics into two groups, those primarily important for agriculture and those primarily important for trade, we find that the agriculture variables have relatively more explanatory power in countries that developed early and the trade variables have relatively more in countries that developed late, despite the fact that the latter group of countries are far more dependent on agriculture today. We explain this apparent puzzle in a model in which two technological shocks occur, one increasing agricultural productivity and the other decreasing transportation costs, and in which agglomeration economies lead to persistence in urban locations. In countries that developed early, structural transformation due to rising agricultural productivity began at a time when transport costs were still relatively high, so urban agglomerations were localized in agricultural regions. When transport costs fell, these local agglomerations persisted. In late developing countries, transport costs fell well before structural transformation. To exploit urban scale economies, manufacturing agglomerated in relatively few, often coastal, locations. With structural transformation, these initial coastal locations grew, without formation of more cities in the agricultural interior.

Keywords: agriculture; physical geography; development (search for similar items in EconPapers)
JEL-codes: J1 N0 (search for similar items in EconPapers)
Pages: 82 pages
Date: 2016-05
New Economics Papers: this item is included in nep-geo, nep-lab and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://eprints.lse.ac.uk/66538/ Open access version. (application/pdf)

Related works:
Journal Article: The Global Distribution of Economic Activity: Nature, History, and the Role of Trade1 (2018) Downloads
Working Paper: The global distribution of economic activity: nature, history, and the role of trade (2018) Downloads
Working Paper: The Global Spatial Distribution of Economic Activity: Nature, History and the Role of Trade (2016) Downloads
Working Paper: The Global Spatial Distribution of Economic Activity: Nature, History, and the Role of Trade (2016) Downloads
Working Paper: The Global Spatial Distribution of Economic Activity: Nature, History, and the Role of Trade (2016) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:66538

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().

 
Page updated 2025-03-31
Handle: RePEc:ehl:lserod:66538