Market Access, Economic Geography, and Comparative Advantage: An Empirical Assessment

Donald Davis () and David Weinstein

No 6787, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The increasing returns revolution in trade is incomplete in an important respect there exists no compelling empirical demonstration of the role of increasing returns in determining production and trade structure. One reason is that trade patterns of the canonical increasing returns models are a consequence simply of specialization, which all theories permit. Krugman (1980) shows that increasing returns models with costs of trade economic geography do allow a simple test: home market effects of demand on production. Davis and Weinstein (1996) reject the simple Krugman (1980) model on OECD data. Here we pair the model with a richer geography structure and find evidence of the importance of increasing returns, in combination with comparative advantage, in affecting OECD manufacturing production structure. The results underscore the importance of market access in implementing models of economic geography.

JEL-codes: D5 F1 (search for similar items in EconPapers)
Date: 1998-11
Note: ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (79)

Published as Davis, Donald R. and David E. Weinstein. "Economic Geography And Regional Production Structure: An Empirical Investigation," European Economic Review, 1999, v43(2,Feb), 379-407.

Downloads: (external link)
http://www.nber.org/papers/w6787.pdf (application/pdf)

Related works:
Working Paper: Market Access, Economic Geography and Comparative Advantage: An Empirical Assessment (1998)
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:nbr:nberwo:6787

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w6787

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().