Timeliness, trade and agglomeration

James Harrigan and Anthony Venables

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

Abstract: 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 uncertainties are resolved. Using several related models we show that this can cause clustering of component production. If final assembly takes place in two locations and component production has increasing returns to scale, then component production will tend to cluster around just one of the assembly plants.

Keywords: Just- in-time; clustering; location; trade. (search for similar items in EconPapers)
JEL-codes: F1 L0 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2004-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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http://eprints.lse.ac.uk/2300/ Open access version. (application/pdf)

Related works:
Working Paper: Timeliness, Trade and Agglomeration (2004)
Working Paper: Timeliness, Trade and Agglomeration (2004)
Working Paper: Timeliness, Trade and Agglomeration (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:2300

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