What are Falling Transport Costs doing to Spatial Concentration Across US Counties?

Marcel Fafchamps and Klaus Desmet

No 3853, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Theory is divided on whether falling transport costs lead to more or less spatial concentration of economic activity. Using US county-level data we find that aggregate employment became more concentrated between 1972-92. This aggregate picture hides important differences between sectors though. Whereas non-service sectors have been spreading out, service sectors have become increasingly concentrated by absorbing jobs from nearby areas. This cross-sectional variation lends support to Krugman and Venables (1995), who suggest that falling transport costs initially lead to more concentration, and later on to more dispersion.

Keywords: Spatial concentration; Transport costs; Us counties; Location (search for similar items in EconPapers)
JEL-codes: R11 R12 (search for similar items in EconPapers)
Date: 2003-03
New Economics Papers: this item is included in nep-geo and nep-ure
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Citations: View citations in EconPapers (4)

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