Which Firms are Left in the Periphery? - Spatial Sorting of Heterogeneous Firms with Scale Economies in Transportation

Rikard Forslid and Toshihiro Okubo

No 9413, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper introduces scale economies or density economies in transportation in a trade and geography model with heterogeneous firms. This relatively small change to the standard model produces a new pattern of spatial sorting among firms. Contrary to the existing literature, our model produces the result that firms of intermediate productivity relocate to the large core region, whereas high and low productivity firms remain in the periphery. Trade liberalisation leads to a gradual relocation to the core, with the most productive firms remaining in the periphery.

Keywords: Heterogeneous firms; Scale economies in transportation (search for similar items in EconPapers)
JEL-codes: F12 F15 (search for similar items in EconPapers)
Date: 2013-03
New Economics Papers: this item is included in nep-eff, nep-geo and nep-ure
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: WHICH FIRMS ARE LEFT IN THE PERIPHERY? SPATIAL SORTING OF HETEROGENEOUS FIRMS WITH SCALE ECONOMIES IN TRANSPORTATION (2015)
Working Paper: Which Firms are Left in the Periphery? - Spatial Sorting of Heterogeneous Firms with Scale Economies in Transportation (2013)
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