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The International Division of Industries: Clustering and Comparative Advantage in a Multi-industry Model


  • Venables, Anthony J


We consider a model with a large number of industries and agglomeration forces which cause each industry to concentrate in a single country. We show that the division of industries between countries is not unique, and that identical countries might have different numbers of industries and different wages and real incomes. Countries may gain by using policy to grab a higher proportion of world industry. Bounds on the set of equilibrium divisions of industry are found and we show how, with Ricardian differences in technology, there are equilibria with industries locating in the country where they have a comparative disadvantage. Copyright 1999 by The editors of the Scandinavian Journal of Economics.

Suggested Citation

  • Venables, Anthony J, 1999. " The International Division of Industries: Clustering and Comparative Advantage in a Multi-industry Model," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(4), pages 495-513, December.
  • Handle: RePEc:bla:scandj:v:101:y:1999:i:4:p:495-513

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    References listed on IDEAS

    1. Avinash Dixit & Peter Hammond & Michael Hoel, 1980. "On Hartwick's Rule for Regular Maximin Paths of Capital Accumulation and Resource Depletion," Review of Economic Studies, Oxford University Press, vol. 47(3), pages 551-556.
    2. Heal, Geoffrey M., 1993. "The optimal use of exhaustible resources," Handbook of Natural Resource and Energy Economics,in: A. V. Kneese† & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 3, chapter 18, pages 855-880 Elsevier.
    3. R. M. Solow, 1974. "Intergenerational Equity and Exhaustible Resources," Review of Economic Studies, Oxford University Press, vol. 41(5), pages 29-45.
    4. Kirk Hamilton, 1995. "Sustainable development, the Hartwick rule and optimal growth," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 5(4), pages 393-411, June.
    5. Withagen, Cees & B. Asheim, Geir, 1998. "Characterizing sustainability: The converse of Hartwick's rule," Journal of Economic Dynamics and Control, Elsevier, vol. 23(1), pages 159-165, September.
    6. Solow, Robert M, 1986. " On the Intergenerational Allocation of Natural Resources," Scandinavian Journal of Economics, Wiley Blackwell, vol. 88(1), pages 141-149.
    7. Mitra, Tapan, 1978. "Efficient growth with exhaustible resources in a neoclassical model," Journal of Economic Theory, Elsevier, vol. 17(1), pages 114-129, February.
    8. Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-974, December.
    9. Mitra, Tapan, 2002. "Intertemporal Equity and Efficient Allocation of Resources," Journal of Economic Theory, Elsevier, vol. 107(2), pages 356-376, December.
    10. Dasgupta, Swapan & Mitra, Tapan, 1983. "Intergenerational Equity and Efficient Allocation of Exhaustible Resources," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(1), pages 133-153, February.
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    Cited by:

    1. Diego Puga, 2002. "European regional policies in light of recent location theories," Journal of Economic Geography, Oxford University Press, vol. 2(4), pages 373-406, October.
    2. Helena Marques, 2005. "The skilled u-shaped Europe: is it really and on which side does it stand?," Applied Economics, Taylor & Francis Journals, vol. 37(19), pages 2205-2220.
    3. Helena Marques & Hugh Metcalf, 2009. "Manufacturing Wages In The Enlarged Eu: The Role Of Neighbour-Country Effects," Manchester School, University of Manchester, vol. 77(1), pages 65-81, January.
    4. Pflüger, Michael P. & Tabuchi, Takatoshi, 2016. "Comparative Advantage and Agglomeration of Economic Activity," IZA Discussion Papers 10273, Institute for the Study of Labor (IZA).
    5. Bagoulla, Corinne & Péridy, Nicolas, 2011. "Market access and the other determinants of North–South manufacturing location choice: An application to the Euro-Mediterranean area," Economic Systems, Elsevier, vol. 35(4), pages 537-561.
    6. Epifani, Paolo, 2005. "Heckscher-Ohlin and agglomeration," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 645-657, November.
    7. Tabuchi, Takatoshi & Thisse, Jacques-François, 2002. "Regional Specialization and Transport Costs," CEPR Discussion Papers 3542, C.E.P.R. Discussion Papers.
    8. Toru Kikuchi & Dao-Zhi Zeng, 2004. "On Chamberlinian-Ricardian trade patterns with many industries," Economics Bulletin, AccessEcon, vol. 6(22), pages 1-9.
    9. Henry Overman & Stephen Redding & Anthony J. Venables, 2001. "The Economic Geography of Trade, Production, and Income: A Survey of Empirics," CEP Discussion Papers dp0508, Centre for Economic Performance, LSE.
    10. Maria Florencia Granato, 2011. "REGIONAL NEW ECONOMIC GEOGRAPHY (refereed paper)," ERSA conference papers ersa10p747, European Regional Science Association.
    11. Souleymane Coulibaly, 2004. "Evolving Cityscapes: Agglomeration and Specialization with Mobile Labor and Vertical Linkages," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 04.17, Université de Lausanne, Faculté des HEC, DEEP.
    12. Suga, Nobuhito & Hisanaga, Makoto, 2014. "Trade Patterns and the Gains from Trade in a Chamberlinian-Ricardian Model," Discussion paper series. A 267, Graduate School of Economics and Business Administration, Hokkaido University.
    13. repec:ebl:ecbull:v:6:y:2004:i:22:p:1-9 is not listed on IDEAS

    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)


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