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What said the new economic geography about Portugal? An alternative approach

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  • Martinho, Vítor João Pereira Domingues

Abstract

With this work we try to analyse the agglomeration process in Portugal, using the New Economic Geography models, in a linear and in a non linear way. In a non linear way, of referring, as summary conclusion, that with this work the existence of increasing returns to scale and low transport cost, in the Portuguese regions, was proven and, because this, the existence of agglomeration in Portugal. We pretend, also, in a linear way to explain the complementarily of clustering models, associated with the New Economic Geography, and polarization associated with the Keynesian tradition. As a summary conclusion, we can say which the agglomeration process shows some signs of concentration in Lisboa e Vale do Tejo and the productivity factor significantly improves the results that explain the regional clustering in Portugal. The aim of this paper is to analyze, yet, the relationship between the regional industry clustering and the demand for labor by companies in Portugal. Again, the results are consistent with the theoretical developments of the New Economic Geography, namely the demand for labor is greater where transport costs are lower and where there is a strong links "backward and forward" and strong economies of agglomeration.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 32795.

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Date of creation: 2011
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Handle: RePEc:pra:mprapa:32795

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Keywords: new economic geography; linear and non linear models; Portuguese regions;

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  1. Vitor Joao Pereira Domingues Martinho, 2011. "Regional Agglomeration in Portugal: A Linear Analysis," Papers 1110.5559, arXiv.org.
  2. Keith Head & Thierry Mayer, 2004. "The Empirics of Agglomeration and Trade," Sciences Po publications info:hdl:2441/10191, Sciences Po.
  3. Martinho, Vítor João Pereira Domingues, 2011. "Agglomeration and interregional mobility of labor in Portugal," MPRA Paper 32203, University Library of Munich, Germany.
  4. Martinho, Vítor João Pereira Domingues, 2011. "What said the new economic geography about Portugal?," MPRA Paper 32609, University Library of Munich, Germany.
  5. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  6. Martinho, Vítor João Pereira Domingues, 2011. "The importance of increasing returns to scale in the process of agglomeration in Portugal: A non linear empirical analysis," MPRA Paper 32204, University Library of Munich, Germany.
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