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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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File URL: http://dx.doi.org/10.1016/j.jdeveco.2004.03.002
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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers RP with number 1893.

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Handle: RePEc:cor:louvrp:1893
Note: In : Journal of Development Economics. Elsevier, 77, 75-106, 2005
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