What Determines the Economic Geography of Europe?

Jan I. Haaland, Hans Jarle Kind and Karen Helene Ulltveit-Moe

No 2072, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper focuses on what the driving forces behind industry localisation in Europe are. Based on traditional as well as new trade theory and new economic geography our cross-sectoral empirical analysis seeks to explain the pattern of relative and absolute concentration of manufacturing activity. By comparing impact over time, we also consider whether the single market has had an influence on factors determining localisation. The results indicate that the by far most important determinant of economic geography in Europe is localisation of demand. There is also evidence of cumulative causation in the sense that absolute concentration of production and expenditure mutually influence each other.

Keywords: Agglomeration; Comparative Advantage; Economic Geography; Industrial Localization (search for similar items in EconPapers)
JEL-codes: C21 F14 F15 (search for similar items in EconPapers)
Date: 1999-02
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Citations: View citations in EconPapers (58)

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Working Paper: What Determines the Economic Geography of Europe? (1998)
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