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International Trade, Technological Development, and Agglomeration

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  • Karen Helene Midelfart Knarvik
  • Jostein Tvedt

Abstract

The paper focuses on how localized dynamic external economies of scale may cause uneven technological development internationally, and encourage regional agglomeration of industries. Location‐specific technological progress depends on the absolute number of local innovating firms, and the relative number of innovating firms; i.e., the share of economic activity in a region that takes place within the innovating sector. The creation of industrial clusters contributes to explaining regional specialization, factor prices and welfare, and it appears that the critical size of a region regarding its ability to sustain an industrial cluster depends on whether factors of production are internationally mobile.

Suggested Citation

  • Karen Helene Midelfart Knarvik & Jostein Tvedt, 2000. "International Trade, Technological Development, and Agglomeration," Review of International Economics, Wiley Blackwell, vol. 8(1), pages 149-163, February.
    • Handle: RePEc:bla:reviec:v:8:y:2000:i:1:p:149-163
    DOI: 10.1111/1467-9396.00212
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    JEL classification:

    • F01 - International Economics - - General - - - Global Outlook
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F15 - International Economics - - Trade - - - Economic Integration
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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