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Firms agglomeration and unions

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  • Picard, Pierre M.
  • Toulemonde, Eric

Abstract

This Paper develops a model in which the interaction between product market imperfections, transportation costs, unions and workers immobility across regions creates a tendency for agglomeration of firms when transportation costs are low. The model fits quite well the European experience. It is able to explain the emergence of a centre-periphery pattern with equally populated regions. In the centre, most people work in the unionized industry and earn large wages. In contrast, workers in the periphery are employed at a low wage in a constant return to scale industry.

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Bibliographic Info

Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 50 (2006)
Issue (Month): 3 (April)
Pages: 669-694

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Handle: RePEc:eee:eecrev:v:50:y:2006:i:3:p:669-694

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References

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  1. Giuseppe De Arcangelis & Giordano Mion, 2002. "Spatial Externalities and Empirical Analysis: The case of Italy," series 0006, Dipartimento di Scienze Economiche e Metodi Matematici - Università di Bari, revised Jan 2002.
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Citations

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Cited by:
  1. vom Berge, Philipp, 2011. "Search Unemployment and New Economic Geography," University of Regensburg Working Papers in Business, Economics and Management Information Systems 454, University of Regensburg, Department of Economics.
  2. PICARD, Pierre M. & TOULEMONDE, Eric, . "On monopolistic competition and optimal product diversity: workers' rents also matter," CORE Discussion Papers RP -2175, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Ulrich Zierahn, 2011. "Agglomeration, Congestion, and Regional Unemployment Disparities," MAGKS Papers on Economics 201106, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  4. Zierahn, Ulrich, 2011. "Regional unemployment and new economic geography," HWWI Research Papers 105, Hamburg Institute of International Economics (HWWI).
  5. Philipp vom Berge, 2013. "Search unemployment and new economic geography," The Annals of Regional Science, Springer, vol. 50(3), pages 731-751, June.
  6. Zierahn, Ulrich, 2012. "Monocentric cities, endogenous agglomeration, and unemployment disparities," HWWI Research Papers 130, Hamburg Institute of International Economics (HWWI).
  7. Kenmei Tsubota, 2009. "Agglomeration and wage bargaining," KIER Working Papers 675, Kyoto University, Institute of Economic Research.
  8. Persyn, Damiaan, 2013. "Union wage demands with footloose firms and agglomeration forces," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 142-150.
  9. Vincent Delbecque & Isabelle Méjean & Lise Patureau, 2014. "Labor market institutions and firms’ location choices," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 150(1), pages 115-148, February.

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