Does technological progress affect the location of economic activity ?

Takatoshi Tabuchi, Jacques Thisse and Xiwei Zhu
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Xiwei Zhu: Center for Research of Private Economy and School of Economics, Zhejiang University

No 2014047, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: We show that how technological innovations and migration costs interact to shape the space-economy. Regardless of the level of transport costs, rising labor productivity fosters the agglomeration of activities, whereas falling transport costs do not affect the location of activities. When labor is heterogeneous, the number of workers residing in the more productive region increases by decreasing order of productive efficiency when labor productivity rises. This process affects in opposite directions the welfare of those who have a lower productivity.

Keywords: new economic geography; technological progress; labor productivity; migration costs; labor heterogeneity (search for similar items in EconPapers)
JEL-codes: J61 R12 (search for similar items in EconPapers)
Date: 2014-11-18
New Economics Papers: this item is included in nep-cse, nep-eff, nep-geo and nep-ure
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Related works:
Working Paper: Does Techological Progress Affect the Location of Economic Activity? (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2014047

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