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Urban industrial relocation: The theory of edge cities

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  • Francesca Medda

    ()

  • Peter Nijkamp

    ()

  • Piet Rietveld

    ()

Abstract

In recent years urban economists have focused their attention upon a 'newly recognized' phenomenon: edge cities. Such an urban growth pattern, although having its primary roots in the United States, can be an appropriate framework for examining European trends of urban industrial location. The objective of this study is to examine the relocation of firms from dominant industrial areas, for example, urban CBDs, to new locations at the urban outer boundaries. In this context, we develop in this paper a model based upon the theory of monopolistic competition ("Dixit and Stiglitz, 1977") that examines the economic relationships among firms at different locations. Such intra/inter relationships are examined from the point of view of complementarity. Complementarity in our case combines the two notions of firms' interaction with cumulative and reinforcing effects, and of coordination among firms in the local industrial organizations. Our interest in such a notion springs from the necessity to explain the spatial distribution of firms, particularly why firms in their location often choose to cluster. One of the explanations within the literature is that concentration in clusters is due to the need to share common infrastructures. However, this is just one of many possible explanations for this phenomenon. In our model, we will tackle this aspect of firm locations in clusters from the point of view of the elasticity of substitution. On the basis of the model we will formulate a policy framework regarding industrial suburbanization.

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Bibliographic Info

Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa98p326.

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Date of creation: Aug 1998
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Handle: RePEc:wiw:wiwrsa:ersa98p326

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  1. Henderson, Vernon & Mitra, Arindam, 1996. "The new urban landscape: Developers and edge cities," Regional Science and Urban Economics, Elsevier, vol. 26(6), pages 613-643, December.
  2. Romer, Paul M, 1987. "Growth Based on Increasing Returns Due to Specialization," American Economic Review, American Economic Association, vol. 77(2), pages 56-62, May.
  3. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  4. Ottaviano, Gianmarco I. P., 2001. "Monopolistic competition, trade, and endogenous spatial fluctuations," Regional Science and Urban Economics, Elsevier, vol. 31(1), pages 51-77, February.
  5. 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.
  6. Kiminiori Matsuyama, 1994. "Complementaries and Cumulative Processes In Models of Monopolistic Competition," Discussion Papers 1106, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  7. Hart, Oliver D, 1985. "Monopolistic Competition in the Spirit of Chamberlin: A General Model," Review of Economic Studies, Wiley Blackwell, vol. 52(4), pages 529-46, October.
  8. repec:fth:stanho:e-92-18 is not listed on IDEAS
  9. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
  10. Krugman, Paul & Venables, Anthony J., 1995. "The Seamless World: A Spatial Model of International Specialization," CEPR Discussion Papers 1230, C.E.P.R. Discussion Papers.
  11. Krugman, Paul, 1993. "On the number and location of cities," European Economic Review, Elsevier, vol. 37(2-3), pages 293-298, April.
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Cited by:
  1. Joris Knoben, 2006. "A Relational Account of the Causes of Spatial Firm Mobility," ERSA conference papers ersa06p1, European Regional Science Association.

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