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Determinants of regional comparative advantages in food industries

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  • Sara Johanssona

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  • Therese Norman
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    Abstract

    International markets for food products have shown a strong growth in recent years. Trade flows between countries are increasing and can be seen as a reflection of a higher degree of competition in both domestic and international markets. At the same time, consumers show a growing interest in product attributes associated with the geographical origin of the product and/or specific production methods. This paper studies the region specialization in food industries and uses a shift share analysis to identify regions with comparative advantages in food production in Sweden. The Swedish food sector is of significant size in the domestic economy, and is the fourth largest industry in the Swedish manufacturing sector. The food sector hosts both small and large firms, and is represented in all (geographical) parts of the country. As in many European countries, the food sector is important with respect to employment in rural areas and therefore an obvious target for rural policies. Recent studies of food industries indicate that differences in regional characteristics, such as concentration of firms in the industry (clusters) and concentration of food exporters partly explain the export behavior of firms in the Swedish food industry and food processing firms in France. These findings indicate that location specific factors impact on firms’ competitiveness in international markets. This paper explores this issue further in an empirical analysis of regional comparative advantages in food processing. The purpose of this study is to analyze what type of regional characteristics that stimulate regional specialization in food industries. Of particular interest is the importance of unique regional food specialties, smallscale manufacturing, size of the local market and accessibility to foreign customers in shaping regional comparative advantages in food manufacturing.

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    File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa10/ERSA2010finalpaper1663.pdf
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    Bibliographic Info

    Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa10p1663.

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    Date of creation: Sep 2011
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    Handle: RePEc:wiw:wiwrsa:ersa10p1663

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    1. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
    2. 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.
    3. Lancaster, Kelvin, 1980. "Intra-industry trade under perfect monopolistic competition," Journal of International Economics, Elsevier, vol. 10(2), pages 151-175, May.
    4. Krugman, Paul R, 1981. "Intraindustry Specialization and the Gains from Trade," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 959-73, October.
    5. Arthur, W. Brian, 1990. "'Silicon Valley' locational clusters: when do increasing returns imply monopoly?," Mathematical Social Sciences, Elsevier, vol. 19(3), pages 235-251, June.
    6. Newman, Robert J, 1983. "Industry Migration and Growth in the South," The Review of Economics and Statistics, MIT Press, vol. 65(1), pages 76-86, February.
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