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Transport Cost Decline and Regional Inequalities: Evidence from France

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Author Info
Combes, Pierre-Philippe
Lafourcade, Miren

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Abstract

This Paper first develops a tractable economic geography model we use to investigate the decline of transport costs as a cause of regional inequalities. Next, we perform a structural estimation of this model using a new dataset on road transport costs between the 341 French Employment Areas. We find that intermediate inputs and geographical features play a critical role in the concentration pattern of French economic activities. Estimations being consistent with plausible values for the structural parameters of the model, we finally provide simulations of French local sectoral employment and production conditions. We find a very strong core-periphery structure of short-run profits, which means that large concentration incentives exist in France. By contrast, a short-run analysis of the impact of a transport costs decline reveals that whereas dispersive forces become prevalent at the country level, agglomeration incentives strenghtens specialization within a large number of the French regions. As regards profits, the emergence of a duo-centric structure confirms such a feature.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2894.

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Date of creation: Sep 2001
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Handle: RePEc:cpr:ceprdp:2894

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Related research
Keywords: agglomeration; economic geography; infrastructure; transport costs;

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Find related papers by JEL classification:
F10 - International Economics - - Trade - - - General
O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
R30 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - General

References listed on IDEAS
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Olivier Cadot & Lars-Hendrik Röller & Andreas Stephan, 2002. "Contribution to Productivity or Pork Barrel? The Two Faces of Infrastructure Investment," CIG Working Papers FS IV 02-09, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG). [Downloadable!]
    Other versions:
  2. Pierre-Philippe Combes & Thierry Magnac & Jean-Marc Robin, 2004. "The dynamics of local employment in France," Research Unit Working Papers 0402, Laboratoire d'Economie Appliquee, INRA. [Downloadable!]
    Other versions:
  3. Sylvain Barde, 2008. "Agglomeration incentives in a spatial Cournot model with increasing returns to scale," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer, vol. 1(1), pages 27-35, April. [Downloadable!] (restricted)
    Other versions:
  4. Mion, Giordano, 2003. "Spatial Externalities and Empirical Analysis: The Case of Italy," ZEW Discussion Papers 03-38, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
    Other versions:
  5. Armando Pires, 2006. "Estimating Krugman’s Economic Geography Model for the Spanish Regions," Spanish Economic Review, Springer, vol. 8(2), pages 83-112, June. [Downloadable!] (restricted)
  6. Peter Huber & Michael Paffermayr & Yvonne Wolfmayr, 2006. "Market Potential and Border Effects in Europe," ERSA conference papers ersa06p469, European Regional Science Association. [Downloadable!]
    Other versions:
  7. Pierre-Philippe Combes & Henry Overman, 2003. "The Spatial Distribution of Economic Activities in the European Union," CEP Discussion Papers dp0587, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  8. Combes, Pierre-Philippe & Lafourcade, Miren & Mayer, Thierry, 2003. "Can Business and Social Networks Explain the Border Effect Puzzle?," CEPR Discussion Papers 3750, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  9. Sudekum, Jens, 2002. "Subsidizing Education in the Economic Periphery: Another Pitfall of Regional Policies?," Discussion Paper Series 26130, Hamburg Institute of International Economics. [Downloadable!]
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  10. Harry Garretsen & Marc Schramm & Steven Brakman, 2003. "The Spatial Distribution of Wages: Estimating the Helpman-Hanson model for Germany," Working Papers 03-08, Utrecht School of Economics. [Downloadable!]
  11. Rytchkov Oleg & Shevyakhova Elizaveta, 2004. "Regional Reallocation of Russian Industry in Transition," EERC Working Paper Series 04-10e, EERC Research Network, Russia and CIS. [Downloadable!]
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  13. MION, Giordano, 2003. "Spatial externalities and empirical analysis: the case of Italy," CORE Discussion Papers 2003015, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
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  17. Combes, Pierre-Philippe & Lafourcade, Miren, 2003. "Core-Periphery Patterns of Generalized Transport Costs: France, 1978-98," CEPR Discussion Papers 3958, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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