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Does technological progress affect the location of economic activity ?

Author

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  • TABUCHI, Takatoshi

    (University of Tokyo, Faculty of Economics and Research Institute of Economics, Trade & Industry)

  • THISSE, Jacques-François

    (Université catholique de Louvain, CORE, Belgium; NRU-Higher School of Economics, Russia; CEPR)

  • ZHU, Xiwei

    (Center for Research of Private Economy and School of Economics, Zhejiang University)

Abstract

We show that how technological innovations and migration costs interact to shape the space-economy. Regardless of the level of transport costs, rising labor productivity fosters the agglomeration of activities, whereas falling transport costs do not affect the location of activities. When labor is heterogeneous, the number of workers residing in the more productive region increases by decreasing order of productive efficiency when labor productivity rises. This process affects in opposite directions the welfare of those who have a lower productivity.

Suggested Citation

  • TABUCHI, Takatoshi & THISSE, Jacques-François & ZHU, Xiwei, 2014. "Does technological progress affect the location of economic activity ?," LIDAM Discussion Papers CORE 2014047, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2014047
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    References listed on IDEAS

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    More about this item

    Keywords

    new economic geography; technological progress; labor productivity; migration costs; labor heterogeneity;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • 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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