Economic development and industrial concentration: An inverted U-curve
AbstractThis paper sets up an economic geography model to show the endogenous forces that determine the degree of industry concentration in the course of economic development. The model includes centrifugal forces, such as home market effects and access to intermediate suppliers, and centripetal forces, such as demand pull of dispersed resources and congestion effects. Economic development increases the size of the industrial sector in terms of employment relative to the size of the agricultural sector. The relative strength of centripetal and centrifugal forces depends on the initial industry distribution, transport costs, and the level of economic development. These parameters lead to an inverted U-curve pattern of industry concentration, which is first increasing and then decreasing with per capita GDP. The model shows why the curve is more pronounced in newly industrializing economies than in industrialized countries, thereby explaining exceptionally high primacy ratios in today's developing countries.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 770.
Date of creation: 1996
Date of revision:
Economic Geography; Agglomeration; Industrialization; Development;
Find related papers by JEL classification:
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
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.:
- Raul Livas Elizondo & Paul Krugman, 1992.
"Trade Policy and the Third World Metropolis,"
NBER Working Papers
4238, National Bureau of Economic Research, Inc.
- Brakman, S. & Garretsen, H. & Gigengack, R. & van Marrewijk, C. & Wagenvoort, R., 1993. "Congestion and Industrial Location," Papers 554, Groningen State, Institute of Economic Research-.
- Grossman, Gene M & Krueger, Alan B, 1995.
"Economic Growth and the Environment,"
The Quarterly Journal of Economics,
MIT Press, vol. 110(2), pages 353-77, May.
- Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
- Krugman, Paul, 1993. "On the number and location of cities," European Economic Review, Elsevier, vol. 37(2-3), pages 293-298, April.
- Venables, Anthony J., 1993.
"Equilibrium Locations of Vertically Linked Industries,"
CEPR Discussion Papers
802, C.E.P.R. Discussion Papers.
- Venables, Anthony J, 1996. "Equilibrium Locations of Vertically Linked Industries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(2), pages 341-59, May.
- Anthony J. Venables, 1993. "Equilibrium Locations of Vertically Linked Industries," CEP Discussion Papers dp0137, Centre for Economic Performance, LSE.
- repec:wop:humbsf:1996-65 is not listed on IDEAS
- Junius, Karsten, 1996. "Limits to industrial agglomeration," Kiel Working Papers 762, Kiel Institute for the World Economy.
- Selden Thomas M. & Song Daqing, 1994. "Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions?," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 147-162, September.
- Dixit, Avinash K & Stiglitz, Joseph E, 1975.
"Monopolistic Competition and Optimum Product Diversity,"
The Warwick Economics Research Paper Series (TWERPS)
64, University of Warwick, Department of Economics.
- Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
- Paul Krugman & Anthony J. Venables, 1995.
"Globalization and the Inequality of Nations,"
NBER Working Papers
5098, National Bureau of Economic Research, Inc.
- Krugman, Paul & Venables, Anthony J., 1994. "Globalization and the Inequality of Nations," CEPR Discussion Papers 1015, C.E.P.R. Discussion Papers.
- Krugman, Paul & Venables, Anthony J., 1995. "Globalization and the Inequality of Nations," Working Paper Series 430, Research Institute of Industrial Economics.
- Brezis, Elise S & Krugman, Paul R, 1997.
" Technology and the Life Cycle of Cities,"
Journal of Economic Growth,
Springer, vol. 2(4), pages 369-83, December.
- Paul Krugman, 1990.
"Increasing Returns and Economic Geography,"
NBER Working Papers
3275, National Bureau of Economic Research, Inc.
- repec:fth:iniesr:430 is not listed on IDEAS
- Wolfgang HÄRDLE & J. MARRON & L. YANG, 1996. "Discussion," SFB 373 Discussion Papers 1996,65, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Stern, David I. & Common, Michael S. & Barbier, Edward B., 1996. "Economic growth and environmental degradation: The environmental Kuznets curve and sustainable development," World Development, Elsevier, vol. 24(7), pages 1151-1160, July.
- Syrquin, Moshe, 1988. "Patterns of structural change," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 7, pages 203-273 Elsevier.
- Knaap, T., 1998. "A survey of complementaries in growth and location theories," Research Report 98C44, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
- Nunnenkamp, Peter, 1997. "Aufhol- und Abkopplungsprozesse im europäischen Binnenmarkt," Open Access Publications from Kiel Institute for the World Economy 1715, Kiel Institute for the World Economy (IfW).
- Natércia Godinho Mira, 2008. "Indústria transformadora portuguesa: especialização das regiões e/ou concentração geográfica de indústrias?," CEFAGE-UE Working Papers 2008_13, University of Evora, CEFAGE-UE (Portugal).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dieter Stribny).
If references are entirely missing, you can add them using this form.