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What are Falling Transport Costs doing to Spatial Concentration Across US Counties?

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  • Desmet, Klaus
  • Fafchamps, Marcel

Abstract

Theory is divided on whether falling transport costs lead to more or less spatial concentration of economic activity. Using US county-level data we find that aggregate employment became more concentrated between 1972-92. This aggregate picture hides important differences between sectors though. Whereas non-service sectors have been spreading out, service sectors have become increasingly concentrated by absorbing jobs from nearby areas. This cross-sectional variation lends support to Krugman and Venables (1995), who suggest that falling transport costs initially lead to more concentration, and later on to more dispersion.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3853.

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Date of creation: Mar 2003
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Handle: RePEc:cpr:ceprdp:3853

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Keywords: location; spatial concentration; transport costs; US counties;

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Cited by:
  1. R. Paci & S. Usai, 2006. "Agglomeration economies and growth-The case of Italian local labour systems, 1991-2001," Working Paper CRENoS 200612, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  2. Desmet, Klaus & Fafchamps, Marcel, 2006. "Employment concentration across U.S. counties," Regional Science and Urban Economics, Elsevier, vol. 36(4), pages 482-509, July.
  3. Sonia Deidda & Raffaele Paci & Stefano Usai, 2003. "Spatial Externalities and Local Economic Growth," ERSA conference papers ersa03p81, European Regional Science Association.

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