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Does Techological Progress Affect the Location of Economic Activity?

Listed author(s):
  • Tabuchi, T.

    ()

    (University of Tokyo)

  • Thisse, J.-F.

    ()

    (Université catholique de Louvain, CORE, Belgium)

  • Zhu, X.

    ()

    (Zhejiang University)

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.

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File URL: http://www.uclouvain.be/cps/ucl/doc/core/documents/coredp2015_11web.pdf
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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2015011.

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Date of creation: 14 Jan 2015
Handle: RePEc:cor:louvco:2015011
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