 Market size and urban hierarchyNo 2004029, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) Abstract: We investigate the importance of market size as a determinant for industrial location patterns. In order to focus on a broad range of sectors,including the service industries, both traded and non-traded goods are taken into consideration. In our model, traded goods industries always exhibit a "home market effect" (HME), whereas the existence of such an effect for non-traded goods and services crucially hinges on the degree of product differentiation. High degrees of product differentiation generally support a HME, whereas a reverse HME may arise when products are sufficiently close substitutes. Our results point to the existence of some market size dependent "industrial urban" hierarchy: highly differentiated non-traded services are more sensitive to market size than manufacturingactivities and traded services, which in turn are more sensitive to market size than closely substitutable non-traded services. Keywords: reverse home market effect; traded goods; non-traded goods; service industries; urban hierarchy (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2004029 Access Statistics for this paper More papers in LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC. |
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