Geography and comparative advantage

Luca Ricci

No 321, Discussion Papers, Series II from University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy"

Abstract: This paper investigates the relation between agglomeration of economic activity and the pattern of specialization of countries. We develop a model encompassing a Ricardian comparative advantage, increasing returns to scale, product differentiation, monopolistic competition, trade costs, and factor mobility. Several interesting results arise. An endogenous relative increase in the size of one country makes this country less specialized in the homogeneous constant returns commodity and more specialized in the differentiated increasing returns IRS sectors; within the IRS industry, this country will become less specialized in the differentiated good in which it has a comparative advantage. Agglomeration occurs not only in large markets, but also in locations with a high average efficiency in the increasing return industry. Ceteris paribus, comparative advantage drives specialization, while absolute advantage drives agglomeration.

Keywords: Agglomeration; Specialization; Ricardian comparative advantage; Monopolistic competition; Scale economies; Location (search for similar items in EconPapers)
JEL-codes: F11 F12 F15 L13 R12 (search for similar items in EconPapers)
Date: 1996
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/101515/1/726665266.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:zbw:kondp2:321

Access Statistics for this paper

More papers in Discussion Papers, Series II from University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy" Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().