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Sectoral specialisation versus functional specialisation

Author

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  • Dan Pierce
  • Michael Perlberg

Abstract

We study the role of sectoral specialisation and functional specialisation in the growth and development of local economies. In our model with Ricardian efficiency differences and agglomeration economies, locations choose endogenously the degree of sectoral specialisation and functional specialisation. The sourcing of function inputs into a sector are geographically separated by a spatial transaction cost. Model-based simulations suggest that spatial transaction costs determine the level of sectoral specialisation and functional specialisation of locations.

Suggested Citation

  • Dan Pierce & Michael Perlberg, 2020. "Sectoral specialisation versus functional specialisation," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 63(3), pages 1-26.
    • Handle: RePEc:eei:journl:v:63:y:2020:i:3:p:1-26
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    More about this item

    Keywords

    Sectoral specialisation; functional specialisation; Ricardian efficiency differences; agglomeration economies; spatial transaction cost;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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