Trade Costs and the Agglomeration of Production

Gianluca Cafiso

No 2010/7, DEMQ Working Paper Series from University of Catania, Department of Economics and Quantitative Methods

Abstract: The object of this paper is to study the evolution of trade costs and of the agglomeration of production, as well as their relation. The Home Market Effect prescribes increasing agglomeration when trade costs decrease because it is supposed to strengthen. We study the joint variation of trade costs and agglomeration in all the sectors that we consider, and specifically in those which support the home market effect hypothesis. We employ an original approach based on the combination of different bootstrap distributions. Our analysis yields insights into the evolution of trade costs and agglomeration in Europe in the last decade.

Keywords: Trade Costs; Agglomeration of Production; Home Market Effect; Bootstrap (search for similar items in EconPapers)
JEL-codes: F10 F12 F15 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2010-12-22
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (2)

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