EconPapers    
Economics at your fingertips  
 

(De) industrialization in the Von Thünen’s economy

José Pontes () and Armando Garcia Pires ()

No 2020/0141, Working Papers REM from ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa

Abstract: In the Von Thunen (1826)'s economy, manufacturing decentralization is viewed as the refining of an agricultural commodity near the cultivation site, which substitutes for its transport to an industrial mill located in the Town. As Friedrich List (1841) added, this substitution is economically feasible only if the savings in transport costs following from in site refining cover the increase in fixed costs associated with a second industrial plant. In market equilibrium terms, this happens when the decentralized machine is provided collectively by the landowners, who fund it through the proceeds of the rise in total land rent following from the industrial investment. This condition will be satisfied more likely in a large economy with high average transport costs and where manufacturing specializes in relatively weight losing activities. If industrial decentralization is feasible, then the new factories will prefer to locate outside the Town, in formely rural areas endowed with an intermediate degree of centrality. Their distance to the Town will be directly related with the intensity of input refining that they are able to carry out. This model appears to account for main stylized trends of manufacturing relocation nowadays, which are jointly labeled as "(de)industrialization".

Keywords: Von Thunen; Manufacturing Location; Industrialization; External Economies of Scale (search for similar items in EconPapers)
JEL-codes: B20 O12 O14 R12 (search for similar items in EconPapers)
Date: 2020-09
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://rem.rc.iseg.ulisboa.pt/wps/pdf/REM_WP_0141_2020.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ise:remwps:wp01412020

Access Statistics for this paper

More papers in Working Papers REM from ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa ISEG - Lisbon School of Economics and Management, REM, R. Miguel Lupi, 20, LISBON, PORTUGAL.
Bibliographic data for series maintained by Sandra Araújo ().

 
Page updated 2021-07-25
Handle: RePEc:ise:remwps:wp01412020