Trade Costs and the Agglomeration of Production
AbstractThe object of this paper is to study the evolution of trade costs and of the agglomeration of production, as well as their relation. The Home Market Effect prescribes increasing agglomeration when trade costs decrease because it is supposed to strengthen. We study the joint variation of trade costs and agglomeration in all the sectors that we consider, and specifically in those which support the home market effect hypothesis. We employ an original approach based on the combination of different bootstrap distributions. Our analysis yields insights into the evolution of trade costs and agglomeration in Europe in the last decade.
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Bibliographic InfoPaper provided by University of Catania, Department of Economics and Quantitative Methods in its series DEMQ Working Paper Series with number 2010/7.
Length: 29 pages
Date of creation: 22 Dec 2010
Date of revision:
Trade Costs; Agglomeration of Production; Home Market Effect; Bootstrap;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F15 - International Economics - - Trade - - - Economic Integration
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- Sun, Churen & Yu, Zhihao & Zhang, Tao, 2012. "Agglomeration and Trade with Heterogeneous Firms," MPRA Paper 49001, University Library of Munich, Germany, revised 17 Aug 2013.
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