Regional Specialization and Transport Costs

Jacques Thisse and Takatoshi Tabuchi

No 3542, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We consider an economic geography model in which all firms and workers are mobile, but the agglomeration of firms and workers within a region generates urban costs. We show that industries with high transport costs tend to be more agglomerated than industries with low transport costs. This is to be contrasted to the result obtained in the one-industry case in which agglomeration arises for low transport costs. We also show that firms supplying non-tradable consumer services are more agglomerated than firms belonging to light industries. In this case, the equilibrium involves an urban hierarchy: for each good, a larger array of varieties is produced within the same city.

Keywords: Interregional mobility; Intersectoral mobility; Agglomeration; Transport costs; Urban costs (search for similar items in EconPapers)
JEL-codes: F12 F16 J60 L13 R12 (search for similar items in EconPapers)
Date: 2002-09
New Economics Papers: this item is included in nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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