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Firms Agglomeration and Unions

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  • Picard, Pierre M
  • Toulemonde, Eric

Abstract

This Paper develops a model in which the interaction between product market imperfections, transportation costs, unions and workers immobility across regions creates a tendency for agglomeration of firms when transportation costs are low. The model fits quite well the European experience. It is able to explain the emergence of a centre-periphery pattern with equally populated regions. In the centre, most people work in the unionized industry and earn large wages. In contrast, workers in the periphery are employed at a low wage in a constant return to scale industry.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3323.

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Date of creation: Apr 2002
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Handle: RePEc:cpr:ceprdp:3323

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Keywords: agglomeration; monopolistic competition; unions;

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References

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  1. OTTAVIANO, Gianmarco & THISSE, Jacques-François, 1999. "Agglomeration and trade revisited," CORE Discussion Papers 1999041, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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Citations

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Cited by:
  1. Ulrich Zierahn, 2012. "Monocentric Cities, Endogenous Agglomeration, and Unemployment Disparities," MAGKS Papers on Economics 201238, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  2. Pierre M. Picard & Eric Toulemonde, 2008. "On monopolistic competition and optimal product diversity: workers ’ rents also matter," CREA Discussion Paper Series 08-09, Center for Research in Economic Analysis, University of Luxembourg.
  3. Ulrich Zierahn, 2013. "Agglomeration, congestion, and regional unemployment disparities," The Annals of Regional Science, Springer, vol. 51(2), pages 435-457, October.
  4. Persyn, Damiaan, 2013. "Union wage demands with footloose firms and agglomeration forces," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 142-150.
  5. Kenmei Tsubota, 2009. "Agglomeration and wage bargaining," KIER Working Papers 675, Kyoto University, Institute of Economic Research.
  6. Vincent Delbecque & Isabelle Méjean & Lise Patureau, 2014. "Labor market institutions and firms’ location choices," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 150(1), pages 115-148, February.
  7. Zierahn, Ulrich, 2011. "Regional unemployment and new economic geography," HWWI Research Papers 105, Hamburg Institute of International Economics (HWWI).
  8. vom Berge, Philipp, 2011. "Search Unemployment and New Economic Geography," University of Regensburg Working Papers in Business, Economics and Management Information Systems 454, University of Regensburg, Department of Economics.
  9. Philipp vom Berge, 2013. "Search unemployment and new economic geography," The Annals of Regional Science, Springer, vol. 50(3), pages 731-751, June.

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