The division of labor need not imply regional specialization
AbstractThe regional specialization of economic activities is generally deemed desirable for three reasons: (1) the law of comparative advantage; (2) localized economies of scale; and (3) knowledge spillovers. Taking a methodological individualist perspective, we claim that: (1) the law of comparative advantage, while valid for individuals and firms, does not necessarily imply regional specialization when regions are viewed as consisting of heterogeneous individuals; (2) localized economies of scale are seldom specific to one industry and external in all but the regional level; and (3) the study of knowledge spillovers is inconclusive and would benefit from a more disaggregated perspective.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Behavior & Organization.
Volume (Year): 74 (2010)
Issue (Month): 1-2 (May)
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Regional specialization Comparative advantage Economies of scale and scope Knowledge spillovers;
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