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The Spread of Industry: Spatial Agglomeration in Economic Development

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  • Puga, Diego
  • Venables, Anthony J.

Abstract

This paper describes the spread of industry from country to country as a region grows. All industrial sectors are initially agglomerated in one country, tied together by input-output links between firms. Growth expands industry more than other sectors, bidding up wages in the country in which industry is clustered. At some point some firms start to move away, and when a critical mass is reached industry expands in another country, raising wages there. We establish the circumstance sin which industry spill over, which sectors move out first, and which are more important in triggering a critical mass.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of the Japanese and International Economies.

Volume (Year): 10 (1996)
Issue (Month): 4 (December)
Pages: 440-464

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Handle: RePEc:eee:jjieco:v:10:y:1996:i:4:p:440-464

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Web page: http://www.elsevier.com/locate/inca/622903

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  1. Anthony J. Venables, 1993. "Equilibrium Locations of Vertically Linked Industries," CEP Discussion Papers, Centre for Economic Performance, LSE dp0137, Centre for Economic Performance, LSE.
  2. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS), University of Warwick, Department of Economics 64, University of Warwick, Department of Economics.
  3. Krugman, Paul & Venables, Anthony J., 1995. "Globalization and the Inequality of Nations," Working Paper Series, Research Institute of Industrial Economics 430, Research Institute of Industrial Economics.
  4. Young, Alwyn, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 110(3), pages 641-80, August.
  5. repec:fth:iniesr:430 is not listed on IDEAS
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