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Do migrants believe in market potential?

Author

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  • Matthieu Crozet

    (TEAM - Théories et Applications en Microéconomie et Macroéconomie - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

New economic geography models predict migration flows peripheral regions toward central ones. Agglomeration occurs in these models because firms, which tend to locate in large demand regions, and workers, who look for high real wages, are driven by the same force defined by the market potential function. As in Hanson [1998], we estimate this function and thereby all the parameters of the standard economic geography model. However Hanson estimated an equation of wage determination, whereas we study the market potential through a much more central relation of the model. We estimate the worker motion law on inter-regional migrations data for live European countries. The migrant flow received by a region increases with its market potential, which confirms the global relevance of the economic geography model. Moreover main parameters estimates are consistent with the theoretical framework.

Suggested Citation

  • Matthieu Crozet, 2000. "Do migrants believe in market potential?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-03721418, HAL.
    • Handle: RePEc:hal:cesptp:halshs-03721418
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03721418
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    Cited by:

    1. repec:spo:wpecon:info:hdl:2441/10191 is not listed on IDEAS
    2. Head, Keith & Mayer, Thierry, 2004. "The empirics of agglomeration and trade," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 59, pages 2609-2669, Elsevier.
    3. Keith Head & Thierry Mayer, 2004. "Market Potential and the Location of Japanese Investment in the European Union," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 959-972, November.
    4. Dzienis Anna Maria, 2019. "Modern interregional migration: evidence from Japan and Poland," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 55(1), pages 66-80, March.
    5. Niebuhr, Annekatrin, 2004. "Market Access and Regional Disparities: New Economic Geography in Europe," Discussion Paper Series 26148, Hamburg Institute of International Economics.
    6. repec:hal:wpspec:info:hdl:2441/10191 is not listed on IDEAS
    7. repec:hal:spmain:info:hdl:2441/10191 is not listed on IDEAS
    8. Head, Keith & Mayer, Thierry, 2004. "The empirics of agglomeration and trade," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 59, pages 2609-2669, Elsevier.

    More about this item

    Keywords

    market potential; agglomeration; migrations; economic geography;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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