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Integration, Specialization, and the Adjustment

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Author Info
Paul Krugman
Anthony Venables

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Abstract

In the United States, many industries have a Silicon Valley-type geographic localization. In Europe, these same industries often have four or more major centers of production. This difference is presumably the result of the formal and informal trade barriers that have divided the European market. With the growing integration of that market, however, there is the possibility that Europe will develop an American-style economic geography. This paper uses a theoretical model of industrial localization to demonstrate this possibility, and to show the possible transition costs associated with this shift.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4559.

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Date of creation: Dec 1993
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Handle: RePEc:nbr:nberwo:4559

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Find related papers by JEL classification:
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
F15 - International Economics - - Trade - - - Economic Integration

References listed on IDEAS
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  1. 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. [Downloadable!] (restricted)
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  2. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June. [Downloadable!] (restricted)
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(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. Yochanan Shachmurove, 2007. "Geography and Industry Meets Venture Capital," PIER Working Paper Archive 07-015, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania. [Downloadable!]
  2. Gordon H. Hanson, 1994. "Localization Economies, Vertical Organization and Trade," NBER Working Papers 4744, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Natacha Gilson, 2006. "How to be Well Shod to Absorb Shocks? Shock Synchronization and Joining the Euro Zone," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  4. Niebuhr, Annekatrin, 2005. "The Impact of EU Enlargement on European Border Regions," Discussion Paper Series 26384, Hamburg Institute of International Economics. [Downloadable!]
  5. Resmini, Laura, 2006. "Theoretical and Methodological Study on Comparative Advantages in Dynamic Growth Regions, Convergence and Inequalities Patterns," Papers DYNREG03, Economic and Social Research Institute (ESRI). [Downloadable!]
  6. Marco Leonardi, 1997. "Regional Adjustment to Employment Shocks: Italy 1960-1994," Working Papers 16, University of Milano-Bicocca, Department of Economics, revised Sep 1998. [Downloadable!]
  7. Russell Hillberry & David Hummels, 2002. "Explaining Home Bias in Consumption: The Role of Intermediate Input Trade," NBER Working Papers 9020, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Hartman, Darcy & Sheldon, Ian & Tweeten, Luther, 1999. "Location Of Vertically Linked Industries Under Free Trade: Case Studies Of Orange Juice And Tomato Paste In The Western Hemisphere," Working Papers 14580, International Agricultural Trade Research Consortium. [Downloadable!]
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