Gates, hubs and urban primacy in Sub-Saharan Africa

We investigate the impact of changes in international trade and domestic transport costs on the internal geography of a domestic economy linked to the rest of the World through a hub. We address that issue by developing two three regions model, namely a version of the Footlose Entrepreneur and a model à la Ottaviano et al. (2002). One region represents the rest of the World, while the two others compose the domestic economy. One region of the Domestic economy, the hub, exhibits a 'geographical advantage' in terms of easier access to the rest of the World. We find the standard result that decreases in transports and trade costs raise the likelihood of agglomeration in the domestic economy. However, high interregional transport may induce partial agglomeration in the hinterland even in case of trade integration. Therefore depending on the level of transportation costs, hinterland remoteness may not be a locational 'disadvantage' as Behrens et al. (2007) pointed out.