How endogenous asymmetries in interregional market access trigger regional divergence

Kristian Behrens ()

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Abstract: We investigate how asymmetric trade patterns in differentiated products affect the regional distribution of economic activities. The asymmetry in interregional market access is an endogenous result of price competition and industry location and arises for intermediate values of trade costs. We show that the emergence of one-way trade in differentiated products gives rise to strong agglomeration forces and leads to the absorption of the smaller region's industry by the larger region. The number of spatial equilibria increases once the pattern of trade is endogenously accounted for.

Keywords: Asymmetric trade patterns; Regional divergence; Factor mobility; Market access; Economic geography (search for similar items in EconPapers)
Date: 2005-09
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Citations: View citations in EconPapers (18)

Published in Regional Science and Urban Economics, 2005, 35 (5), pp.471-492

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Journal Article: How endogenous asymmetries in interregional market access trigger regional divergence (2005)
Working Paper: How endogenous asymmetries in interregional market access trigger regional divergence (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00111972

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