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Agglomeration in a global Economy: A Survey

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  • G Ottaviano
  • Diego Puga

Abstract

This review of recent contributions reveals common conclusions about the effects of integration on location. For high trade costs, the need to supply markets locally encourages firms to spread across different regions. Integration weakens the incentives for self-sufficiency and for intermediate values of trade costs pecuniary externalities induce firms and workers to cluster together, turning location into a self-reinforcing process. However, agglomeration raises the price of immobile local factors and goods, so far low transport costs firms may spread to regions where those prices are lower.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0356.

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Date of creation: Aug 1997
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Handle: RePEc:cep:cepdps:dp0356

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Cited by:
  1. H. Hanson, Gordon, 2005. "Market potential, increasing returns and geographic concentration," Journal of International Economics, Elsevier, vol. 67(1), pages 1-24, September.
  2. Keller, Wolfgang & Li, Ben & Shiue, Carol Hua, 2012. "Shanghai’s Trade, China’s Growth: Continuity, Recovery, and Change since the Opium War," CEPR Discussion Papers 8808, C.E.P.R. Discussion Papers.
  3. Hanson, Gordon H, 1998. "North American Economic Integration and Industry Location," Oxford Review of Economic Policy, Oxford University Press, vol. 14(2), pages 30-44, Summer.
  4. Henry G. Overman & Stephen Redding & Anthony J. Venables, 2001. "The economic geography of trade, production, and income: a survey of empirics," LSE Research Online Documents on Economics 3712, London School of Economics and Political Science, LSE Library.
  5. Dominique Peeters & Jacques Thisse & Isabelle Thomas, 1998. "Transportation networks and the location of human activities," ERSA conference papers ersa98p268, European Regional Science Association.
  6. Frances Ruane & Anne Marie Gleeson & Julie Sutherland, 2005. "Promoting Industrial Clusters: Evidence from Ireland," The Institute for International Integration Studies Discussion Paper Series iiisdp89, IIIS.

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