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Agricultural sector and industrial agglomeration

  • Picard, Pierre M.
  • Zeng, Dao-Zhi

We investigate an economic geography model in which agricultural goods are costly to transport and in which manufactures hire labor from the local agricultural sector as unskilled labor. We show that agricultural transport costs and local-unskilled labor requirements in firms act as a dispersion force. Location equilibria are compared with the first and second best outcomes and we show that their structure crucially depend on the parameters of agricultural sector.

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Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 77 (2005)
Issue (Month): 1 (June)
Pages: 75-106

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Handle: RePEc:eee:deveco:v:77:y:2005:i:1:p:75-106
Contact details of provider: Web page: http://www.elsevier.com/locate/devec

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  20. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
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