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Industrial Agglomeration and Economic Development

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Author Info
Kurt Hafner ()
Abstract

The paper outlines a static equilibrium model, which analyses the economic development in a two-country case by considering interregional migration in R&D-sectors. The effects of migration and firm decisions on both industrial agglomeration and economic development will be shown: lock-in-effects and free market entry will lead to a concentration of firms. In addition, the consideration of fundamental and secondary research activity leads to a higher number of firms and products by means of cost reduction and spillover effects. The resulting demand of unskilled and skilled labor will be met by sectoral and interregional migration. This reinforces the concentration of economic activity and leads to a higher degree of specialization and economic development. The formation of single equilibria is shown under consideration of exogenous shocks: diminishing transportation cost will turn economies, originally equally endowed and with the same economic structure, to spatial concentration and uneven economic development.

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Publisher Info
Paper provided by cege – Center for European, Governance and Economic Development Research, University of Goettingen (Germany). in its series cege – Center for European, Governance and Economic Development Research Discussion Papers with number 31.

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Length: 36
Date of creation: 30 Jun 2004
Date of revision:
Handle: RePEc:got:cegedp:31

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Web page: http://www.cege.uni-goettingen.de
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Related research
Keywords: Economic Geography; Factor mobility; Regional growth theory; R&D; Learning by doing; Spillover effects;

Find related papers by JEL classification:
D5 - Microeconomics - - General Equilibrium and Disequilibrium
O1 - Economic Development, Technological Change, and Growth - - Economic Development
R0 - Urban, Rural, and Regional Economics - - General

This paper has been announced in the following NEP Reports:

References listed on IDEAS
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.:
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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. Kurt A. Hafner, 2006. "Agglomeration, Migration and Tax Competition," DEGIT Conference Papers c011_027, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
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