Geographic Concentration and Increasing Returns

Paolo Surico

Journal of Economic Surveys, 2003, vol. 17, issue 5, 693-708

Abstract: Abstract. Economic activities are highly clustered. Why is geographic concentration becoming a predominant feature of industrialized economies? On the basis of the empirical models developed by the new theories of international trade, our answer is that increasing returns are the driving force of economic geography in the US as well as in Europe. In so doing, we review several econometric methods proposed in the literature to separate and to test alternative theoretical paradigms.

Date: 2003
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