The Spread of Industry: Spatial Agglomeration in Economic Development

Diego Puga and Anthony Venables

No 1354, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper describes the spread of industry from country to country as a region grows. All industrial sectors are initially agglomerated in one country, tied together by input-output links between firms. Growth expands industry more than other sectors, bidding up wages in the country in which industry is clustered. At some point some firms start to move away, and when a critical mass is reached industry expands in another country, raising wages there. We establish the circumstances in which industry spills over, which sectors move out first, and which are more important in triggering a critical mass.

Keywords: Agglomeration; Industrialization; Linkages; Location (search for similar items in EconPapers)
JEL-codes: F12 O14 R12 (search for similar items in EconPapers)
Date: 1996-02
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Citations: View citations in EconPapers (117)

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Related works:
Journal Article: The Spread of Industry: Spatial Agglomeration in Economic Development (1996)
Working Paper: The Spread of Industry: Spatial Agglomeration in Economic Development (1996)
Working Paper: The spread of industry: spatial agglomeration in economic development (1996)
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