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Modeling services sectors' agglomeration within a new economic geography model

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  • Krenz, Astrid

Abstract

This study investigates whether services sectors' agglomeration can be explained within a common New Economic Geography model by Krugman and Venables (1996). Special feature of this modeling is to account for the lower importance of intermediate goods received for the services sector, a fact that has been shown in Empirics for the European Union (Krenz (2010)). The results show different strengths of agglomeration for both the industrial and services sector depending on initial values of strength of intra-sectoral and inter-sectoral inputs, consumers' preferences, scale economies and transport costs. The lower extent of services sectors' agglomeration seen in Empirics can be explained within the model. --

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Bibliographic Info

Paper provided by University of Goettingen, Department of Economics in its series Center for European, Governance and Economic Development Research Discussion Papers with number 147.

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Date of creation: 2012
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Handle: RePEc:zbw:cegedp:147

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Postal: Platz der Göttinger Sieben 3, 37073 Göttingen
Web page: http://www.cege.wiso.uni-goettingen.de/
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Keywords: agglomeration; services; New Economic Geography;

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  1. Sascha Frohwerk, 2008. "Das Cluster-Modell bei sektoral unterschiedlichen Transportkosten," Volkswirtschaftliche Diskussionsbeiträge 97, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät.
  2. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  3. Krugman, Paul & Venables, Anthony J., 1995. "Globalization and the Inequality of Nations," Working Paper Series 430, Research Institute of Industrial Economics.
  4. Krenz, Astrid, 2010. "Services sectors' agglomeration and its interdependence with industrial agglomeration in the European Union," Center for European, Governance and Economic Development Research Discussion Papers 107, University of Goettingen, Department of Economics.
  5. repec:fth:iniesr:430 is not listed on IDEAS
  6. Krenz, Astrid, 2010. "Services sectors' agglomeration and its interdependence with industrial agglomeration in the European Union," Center for European, Governance and Economic Development Research Discussion Papers 107, University of Goettingen, Department of Economics.
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