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Integration, Specialization, and the Adjustment

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  • Paul Krugman
  • Anthony Venables

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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Bibliographic Info

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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Publication status: published as European Economic Review, Vol. 40, nos. 3-5 (April 1996): 959-967.
Handle: RePEc:nbr:nberwo:4559

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  1. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  2. 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.
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Citations

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Cited by:
  1. Annekatrin Niebuhr, 2005. "The Impact of EU Enlargement on European Border Regions," ERSA conference papers ersa05p114, European Regional Science Association.
  2. Bråthen, Svein & Hervik, Arild, 1997. "Strait crossings and economic development : Developing economic impact assessment by means of ex post analyses," Transport Policy, Elsevier, vol. 4(4), pages 193-200, October.
  3. Hanson, Gordon H., 1996. "Economic integration, intraindustry trade, and frontier regions," European Economic Review, Elsevier, vol. 40(3-5), pages 941-949, April.
  4. Fabrizio Erbetta & Luca Agnello, 2001. "The martingales: theoretical and empirical characteristics," CERIS Working Paper 200107, Institute for Economic Research on Firms and Growth - Moncalieri (TO).
  5. Niebuhr, Annekatrin & Schlitte, Friso, 2008. "EU enlargement and convergence: Does market access matter?," HWWI Research Papers 1-16, Hamburg Institute of International Economics (HWWI).
  6. Natacha Gilson, 2006. "How to be Well Shod to Absorb Shocks? Shock Synchronization and Joining the Euro Zone," CESifo Working Paper Series 1878, CESifo Group Munich.
  7. Karl, Helmut & Matus Velasco, Ximena Fernanda, 2004. "Lessons for regional policy from the new economic geography and the endogenous growth theory," Studies in Spatial Development: Chapters, in: Employment and regional development policy: Market efficiency versus policy intervention, pages 71-89 Akademie für Raumforschung und Landesplanung (ARL) - Leibniz-Forum für Raumwissenschaften.
  8. Hartman, Darcy A. & Sheldon, Ian M. & Tweeten, Luther G., 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.
  9. Marco Leonardi, 1997. "Regional Adjustment to Employment Shocks: Italy 1960-1994," Working Papers 16, University of Milano-Bicocca, Department of Economics, revised Sep 1998.
  10. 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).
  11. Gordon H. Hanson, 1994. "Localization Economies, Vertical Organization and Trade," NBER Working Papers 4744, National Bureau of Economic Research, Inc.
  12. FE, Doukouré Charles, 2010. "Réduction de Droits de Douane et Convergence Réelle dans l'UEMOA
    [Tariffs Reduction and Real Convergence in WAEMU]
    ," MPRA Paper 26763, University Library of Munich, Germany.
  13. 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.
  14. Giovanna Segre, 2000. "Foreign Direct Investment and Trade in the EU: Are They Complementary or Substitute in Business Cycles Fluctuations?," CERIS Working Paper 200007, Institute for Economic Research on Firms and Growth - Moncalieri (TO).
  15. 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.
  16. Paolo Giordano & Kun Li, 2012. "An Updated Assessment of the Trade and Poverty Nexus in Latin America," IDB Publications 79119, Inter-American Development Bank.
  17. Christian LONGHI, 2008. "Empirics Of The Metropolitan Productivity Patterns In Europe," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 27, pages 61-82.

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