Knowledge–capital meets new economic geography
We incorporate the now standard knowledge-capital model of multinational firms in a new economic geography setting. The theoretical predictions of our model suggest that unskilled labor mobility leads to less concentration of production than skilled labor mobility does. This is in line with empirical evidence that agglomeration of production among European nations is less pronounced than among US regions. Our model shows that the different patterns in labor mobility can explain actual differences in the spreading of industries. According to our welfare analysis, trade liberalization is likely Pareto-improving for a larger (smaller) country with mobile unskilled (skilled) labor. In the supplement, we investigate the sensitivity of our results in several respects. In the first section, we provide the figures of real factor rewards for the trade liberalization scenarios discussed in and underlying Figures 7 and 8 of the paper. Second, in Figures 3(n) - 5(v) (6(n) - 6b(v)) we infer the existence, or non-existence, of each firm type separately in the τ - λ L -space (τ - λ S -space) for country i firms and all four scenarios of firm regimes. Third, we illustrate how changes in the parameters μ, ρ and σ affect the outcome. Finally, we analyze how the asymmetric endowment with the immobile factor influences the core-periphery patterns.
(This abstract was borrowed from another version of this item.)
Volume (Year): 41 (2007)
Issue (Month): 4 (December)
|Contact details of provider:|| Web page: http://www.springer.com|
|Order Information:||Web: http://link.springer.com/journal/168|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Antonio Ciccone, 1998.
"Agglomeration-effects in Europe,"
Economics Working Papers
499, Department of Economics and Business, Universitat Pompeu Fabra, revised Aug 1999.
- Raybaudi-Massilia, Marzia, 2000.
"Economic Geography and Multinational Enterprise,"
Review of International Economics,
Wiley Blackwell, vol. 8(1), pages 1-19, February.
- Raybaudi Massilia, M., 1995. "Economic geography and multinational enterprise," Discussion Paper Series In Economics And Econometrics 9520, Economics Division, School of Social Sciences, University of Southampton.
- Constant, Amelie F. & Massey, Douglas S., 2003. "Labor Market Segmentation and the Earnings of German Guestworkers," IZA Discussion Papers 774, Institute for the Study of Labor (IZA).
- Mary Amiti, 1999.
"Specialization patterns in Europe,"
Review of World Economics (Weltwirtschaftliches Archiv),
Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 135(4), pages 573-593, December.
- Gianmarco I.P. Ottaviano & Giovanni Peri, 2005.
"Rethinking the Gains from Immigration: Theory and Evidence from the U.S,"
NBER Working Papers
11672, National Bureau of Economic Research, Inc.
- Ottaviano, Gianmarco & Peri, Giovanni, 2005. "Rethinking the Gains from Immigration: Theory and Evidence from the US," CEPR Discussion Papers 5226, C.E.P.R. Discussion Papers.
- Gianmarco I.P. Ottaviano & Giovanni Peri, 2006. "Rethinking the Gains from Immigration: Theory and Evidence from the U.S," Working Papers 2006.52, Fondazione Eni Enrico Mattei.
- Giovanni Peri & Gianmarco I.P. Ottaviano, 2005. "Rethinking the Gains from Immigration: Theory and Evidence from the U.S," Working Papers 58, University of California, Davis, Department of Economics.
- James R. Markusen & Anthony J. Venables, 1995.
"Multinational Firms and The New Trade Theory,"
NBER Working Papers
5036, National Bureau of Economic Research, Inc.
- Markusen, James R., 2002.
"Multinational Firms and the Theory of International Trade,"
8380, University Library of Munich, Germany.
- James R. Markusen, 2004. "Multinational Firms and the Theory of International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633078, December.
- Ekholm, Karolina & Forslid, Rikard, 1998.
"Trade and Location with Horizontal and Vertical Multi-Region Firms,"
Working Paper Series
504, Research Institute of Industrial Economics.
- Ekholm, Karolina & Forslid, Rikard, 2001. " Trade and Location with Horizontal and Vertical Multi-region Firms," Scandinavian Journal of Economics, Wiley Blackwell, vol. 103(1), pages 101-18, March.
- Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 49, pages 2119-2171 Elsevier.
- Krugman, Paul, 1991.
"Increasing Returns and Economic Geography,"
Journal of Political Economy,
University of Chicago Press, vol. 99(3), pages 483-99, June.
- John Kennan & James R. Walker, 2011.
"The Effect of Expected Income on Individual Migration Decisions,"
Econometric Society, vol. 79(1), pages 211-251, 01.
- Kennan,J. & Walker,J.R., 2003. "The effect of expected income on individual migration decisions," Working papers 7, Wisconsin Madison - Social Systems.
- John Kennan & James R. Walker, 2003. "The Effect of Expected Income on Individual Migration Decisions," NBER Working Papers 9585, National Bureau of Economic Research, Inc.
- Barba Navaretti, Giorgio & Checchi, Daniele & Turrini, Alessandro Antonio, 2003.
"Adjusting Labour Demand: Multinational versus National Firms- A Cross-European Analysis,"
CEPR Discussion Papers
3751, C.E.P.R. Discussion Papers.
- Giorgio Barba Navaretti & Daniele Checchi & Alessandro Turrini, 2003. "Adjusting Labor Demand: Multinational Versus National Firms: A Cross-European Analysis," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 708-719, 04/05.
When requesting a correction, please mention this item's handle: RePEc:spr:anresc:v:41:y:2007:i:4:p:857-875. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Rebekah McClure)
If references are entirely missing, you can add them using this form.