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The International Division of Industries: Clustering and Comparative Advantage in a Multi‐industry Model

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  • Anthony J. Venables

Abstract

We consider a model with a large number of industries and agglomeration forces which cause each industry to concentrate in a single country. We show that the division of industries between countries is not unique, and that identical countries might have different numbers of industries and different wages and real incomes. Countries may gain by using policy to grab a higher proportion of world industry. Bounds on the set of equilibrium divisions of industry are found and we show how, with Ricardian differences in technology, there are equilibria with industries locating in the country where they have a comparative disadvantage. JEL classification: F12, R3

Suggested Citation

  • Anthony J. Venables, 1999. "The International Division of Industries: Clustering and Comparative Advantage in a Multi‐industry Model," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(4), pages 495-513, December.
    • Handle: RePEc:bla:scandj:v:101:y:1999:i:4:p:495-513
    DOI: 10.1111/1467-9442.00170
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    Cited by:

    1. Pieter J.H. van Beukering & Jeroen C.J.M. van den Bergh & Marco A. Janssen & Harmen Verbruggen, 2000. "International Material-Product Chains: An Alternative Perspective on International Trade and Trade Theories," Tinbergen Institute Discussion Papers 00-034/3, Tinbergen Institute.
    2. Maria Florencia Granato, 2011. "REGIONAL NEW ECONOMIC GEOGRAPHY (refereed paper)," ERSA conference papers ersa10p747, European Regional Science Association.
    3. Yvonne Wolfmayr-Schnitzer, 2000. "Economic Integration, Specialisation and the Location of Industries. A Survey of the Theoretical Literature," Austrian Economic Quarterly, WIFO, vol. 5(2), pages 73-80, May.
    4. Helena Marques, 2005. "The skilled u-shaped Europe: is it really and on which side does it stand?," Applied Economics, Taylor & Francis Journals, vol. 37(19), pages 2205-2220.
    5. Steven Bond-Smith, 2021. "The unintended consequences of increasing returns to scale in geographical economics [Investing for prosperity: skills, infrastructure and innovation]," Journal of Economic Geography, Oxford University Press, vol. 21(5), pages 653-681.
    6. Thisse, Jacques-François & Tabuchi, Takatoshi, 2002. "Regional Specialization and Transport Costs," CEPR Discussion Papers 3542, C.E.P.R. Discussion Papers.
    7. Lili Tan & Dao-Zhi Zeng, 2014. "Spatial inequality between developed and developing economies," Papers in Regional Science, Wiley Blackwell, vol. 93(2), pages 229-248, June.
    8. Diego Puga, 2002. "European regional policies in light of recent location theories," Journal of Economic Geography, Oxford University Press, vol. 2(4), pages 373-406, October.
    9. Makoto Tawada & Nobuhito Suga & Akihiko Yanase, 2022. "Government, trade and comparative advantage, revisited," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(2), pages 1135-1165, May.
    10. Souleymane Coulibaly, 2004. "Evolving Cityscapes: Agglomeration and Specialization with Mobile Labor and Vertical Linkages," Cahiers de Recherches Economiques du Département d'économie 04.17, Université de Lausanne, Faculté des HEC, Département d’économie.
    11. Takatoshi Tabuchi & Jacques-François Thisse, 2006. "Regional Specialization, Urban Hierarchy, And Commuting Costs," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(4), pages 1295-1317, November.
    12. Pflüger, Michael P. & Tabuchi, Takatoshi, 2016. "Comparative Advantage and Agglomeration of Economic Activity," IZA Discussion Papers 10273, Institute of Labor Economics (IZA).
    13. Steven Bond‐Smith, 2022. "Discretely innovating: The effect of limited market contestability on innovation and growth," Scottish Journal of Political Economy, Scottish Economic Society, vol. 69(3), pages 301-327, July.
    14. Toru Kikuchi & Dao-Zhi Zeng, 2004. "On Chamberlinian-Ricardian trade patterns with many industries," Economics Bulletin, AccessEcon, vol. 6(22), pages 1-9.
    15. Bagoulla, Corinne & Péridy, Nicolas, 2011. "Market access and the other determinants of North–South manufacturing location choice: An application to the Euro-Mediterranean area," Economic Systems, Elsevier, vol. 35(4), pages 537-561.
    16. Fukushima, Marcelo & Kikuchi, Toru, 2008. "Competing Communications Networks and International Trade," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 91-103.
    17. Henry Overman & Stephen Redding & Anthony J. Venables, 2001. "The Economic Geography of Trade, Production, and Income: A Survey of Empirics," CEP Discussion Papers dp0508, Centre for Economic Performance, LSE.
    18. Pflüger, Michael & Tabuchi, Takatoshi, 2019. "Comparative advantage, agglomeration economies and trade costs," Journal of Urban Economics, Elsevier, vol. 109(C), pages 1-13.
    19. Epifani, Paolo, 2005. "Heckscher-Ohlin and agglomeration," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 645-657, November.
    20. Helena Marques & Hugh Metcalf, 2009. "Manufacturing Wages In The Enlarged Eu: The Role Of Neighbour‐Country Effects," Manchester School, University of Manchester, vol. 77(1), pages 65-81, January.
    21. Helena Marques, 2008. "Trade And Factor Flows In A Diverse Eu: What Lessons For The Eastern Enlargement(S)?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(2), pages 364-408, April.
    22. Suga, Nobuhito & Hisanaga, Makoto, 2014. "Trade Patterns and the Gains from Trade in a Chamberlinian-Ricardian Model," Discussion paper series. A 267, Graduate School of Economics and Business Administration, Hokkaido University.
    23. Ching-mu Chen, 2019. "The effect of capital flow on the agglomeration evolution of footloose entrepreneurs," Asia-Pacific Journal of Regional Science, Springer, vol. 3(3), pages 761-791, October.
    24. repec:ebl:ecbull:v:6:y:2004:i:22:p:1-9 is not listed on IDEAS

    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • 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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