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Economic integration and agglomeration in a middle product economy

Author

Listed:
  • PENG, Shin-Kun
  • THISSE, Jacques-Françiois
  • WANG, Ping

Abstract

The paper examines the interactions between economic integration and population agglomeration in a middle product economy displaying neoclassical growth. There are two vertically integrated economies. Each consists of a large number of final good competitive firms operating plants in both regions, and a large number of intermediate goods monopolistically competitive firms operating each in only one region. While immobile workers are employed with intermediate goods to produce the final good, mobile workers are used to design the line of differentiated intermediate-good inputs. Capital is immobile, the final good is non-traded, whereas the intermediate goods are traded. We find that employment agglomeration and output growth need not be positively related. Furthermore, trade is not necessarily beneficial to regional growth, whereas trade between the two regions need not be associated with a widened skilled-unskilled wage gap.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • PENG, Shin-Kun & THISSE, Jacques-Françiois & WANG, Ping, 2006. "Economic integration and agglomeration in a middle product economy," LIDAM Reprints CORE 1878, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:1878
    DOI: 10.1016/j.jet.2005.06.005
    Note: In : Journal of Economic Theory, 131, 1-25, 2006
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    Citations

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    Cited by:

    1. José Pedro Pontes, 2009. "Vertical Linkages and Multinational Plant Size," Working Papers Department of Economics 2009/30, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    2. Chu, Angus C. & Peng, Shin-Kun, 2011. "International intellectual property rights: Effects on growth, welfare and income inequality," Journal of Macroeconomics, Elsevier, vol. 33(2), pages 276-287, June.
    3. Yiming Zhou, 2017. "Urban wage inequality and economic agglomeration," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 59(2), pages 475-494, September.
    4. Shin-Kun Peng & Raymond Riezman & Ping Wang, 2014. "Intermediate Goods Trade, Technology Choice and Productivity," IEAS Working Paper : academic research 14-A003, Institute of Economics, Academia Sinica, Taipei, Taiwan.
    5. Ali, Amjad & Zulfiqar, Kalsoom, 2018. "An Assessment of Association between Natural Resources Agglomeration and Unemployment in Pakistan," MPRA Paper 87968, University Library of Munich, Germany.
    6. Youngmin BAEK & Kazunobu HAYAKAWA & Kenmei TSUBOTA & Shujiro URATA & Kenta YAMANOUCHI, 2019. "Tariff Pass-through in Wholesaling: Evidence from Firm-level Data in Japan," Discussion papers 19064, Research Institute of Economy, Trade and Industry (RIETI).
    7. Zhifen Xu & Yikang Guo & Rongsheng Peng, 2024. "Effectiveness Test of Rural Revitalization Demonstration Policy on Rural Economic Development in China: Analysis of DID Based on the Data of Henan Province in China," SAGE Open, , vol. 14(2), pages 21582440241, May.
    8. Hsu, Wen-Tai & Wang, Ping, 2012. "Trade, firm selection, and industrial agglomeration," Regional Science and Urban Economics, Elsevier, vol. 42(6), pages 975-986.
    9. Juan M.C. Larrosa, 2012. "Strategic Equilibria In A Model Of Economic Growth With Input Interdependence," Bulletin of Economic Research, Wiley Blackwell, vol. 64(4), pages 537-548, October.
    10. repec:ags:aolpei:337996 is not listed on IDEAS
    11. Hikaru OGAWA & Jun OSHIRO & Yasuhiro SATO, 2012. "Capital Mobility—a resource curse or blessing? How, when, and for whom?," Discussion papers 12063, Research Institute of Economy, Trade and Industry (RIETI).
    12. José Pedro Pontes, 2008. "Location of Upstream and Downstream Industries," Working Papers Department of Economics 2008/30, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    13. Fu-Chuan Lai, 2019. "Special feature in honor of Shin-Kun Peng," Asia-Pacific Journal of Regional Science, Springer, vol. 3(3), pages 757-759, October.
    14. Shulin Wan & Weixin Luan & Qiaoqiao Lin, 2021. "Industry linkage, spatial correlation, and city exports: case study of the textile and clothing export industry in China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 66(1), pages 91-112, February.
    15. Marcus Berliant & Ping Wang, 2005. "Dynamic Urban Models: Agglomeration and Growth," Contributions to Economic Analysis, in: Urban Dynamics and Growth: Advances in Urban Economics, pages 533-581, Emerald Group Publishing Limited.
    16. Fujishima, Shota, 2013. "Growth, agglomeration, and urban congestion," Journal of Economic Dynamics and Control, Elsevier, vol. 37(6), pages 1168-1181.
    17. Wei‐Bin Zhang, 2008. "Growth and residential distribution with economic structure and amenity: A synthesis of Solow‐Uzawa's growth, Alonso's urban, and Muth's housing models," Papers in Regional Science, Wiley Blackwell, vol. 87(2), pages 277-303, June.
    18. Wen-Jung Liang & Chao-Cheng Mai & Jacques-François Thisse & Ping Wang, 2019. "On the Economics of Science Parks," NBER Working Papers 25595, National Bureau of Economic Research, Inc.
    19. Kanemoto, Yoshitsugu, 2013. "Second-best cost–benefit analysis in monopolistic competition models of urban agglomeration," Journal of Urban Economics, Elsevier, vol. 76(C), pages 83-92.
    20. Ching-mu Chen & Wan-Jung Cheng & Shin-Kun Peng & Raymond Riezman & Ping Wang, 2019. "Trade Wars, Technology and Productivity," NBER Working Papers 26468, National Bureau of Economic Research, Inc.
    21. Larrosa, Juan MC, 2007. "Optimal growth with intermediate goods interdependence: A difference game approach," MPRA Paper 4675, University Library of Munich, Germany.
    22. Kristian Behrens & Frédéric Robert‐Nicoud, 2014. "Survival of the Fittest in Cities: Urbanisation and Inequality," Economic Journal, Royal Economic Society, vol. 124(581), pages 1371-1400, December.
    23. Kanemoto, Yoshitsugu, 2013. "Evaluating benefits of transportation in models of new economic geography," Economics of Transportation, Elsevier, vol. 2(2), pages 53-62.
    24. Yoshitsugu Kanemoto, 2012. "Cost-Benefit Analysis in Monopolistic Competition Models of Urban Agglomeration," GRIPS Discussion Papers 12-04, National Graduate Institute for Policy Studies.
    25. Ansofino, Anas & Zusmelia, Zubir, 2023. "Global Competitiveness of Trade in the West Coast of Sumatra from the Perspective of the Agglomeration of Economic Approach," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 15(2), June.

    More about this item

    JEL classification:

    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • F15 - International Economics - - Trade - - - Economic Integration
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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