IDEAS home Printed from https://ideas.repec.org/p/cor/louvrp/3109.html

How do trade and communication costs shape the spatial organization of firms?

Author

Listed:
  • Gokan, Toshitaka
  • Kichko, Sergey
  • Thisse, Jacques-François

Abstract

We consider an economic geography setting in which firms are free to choose one of the following organizational types: (i) integrated firms, which perform all their activities at the same location, (ii) horizontal firms, which operate several plants producing the same good at different locations, and (iii) vertical firms, which perform distinct activities at separated locations. We show that there exists a unique organizational equilibrium, which typically involves the coexistence of various organizational forms. We also give necessary and sufficient conditions for the three types of firms to coexist within the same region and show that transportation and communication costs have opposite effects on firms’ organizational choices. This suggests that, depending on its nature, the supply of a new transportation infrastructure may lead to contrasted locational patterns.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Gokan, Toshitaka & Kichko, Sergey & Thisse, Jacques-François, 2020. "How do trade and communication costs shape the spatial organization of firms?," LIDAM Reprints CORE 3109, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:3109
    Note: In : Journal of Urban Economics, Vol. 113, no.103191 (2019)
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Acosta, Camilo & Lyngemark, Ditte Håkonsson, 2025. "Spatial wage differentials, geographic frictions and the organization of labor within firms," Regional Science and Urban Economics, Elsevier, vol. 114(C).
    2. Xing Gao & Senmao Xia & Yu Xiong & Xiaoxian Zhu & Yantao Ling & Mengqiu Cao, 2025. "The underexplored effects of economic transition on intellectual property rights protection: An economic geography perspective," Scientometrics, Springer;Akadémiai Kiadó, vol. 130(7), pages 3313-3347, July.
    3. Cheng Haitao & Kato Hayato & Obashi Ayako, 2021. "Is Environmental Tax Harmonization Desirable in Global Value Chains?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 21(1), pages 379-416, January.
    4. Acosta, Camilo & Lyngemark, Ditte Håkonsson, 2021. "The internal spatial organization of firms: Evidence from Denmark," Journal of Urban Economics, Elsevier, vol. 124(C).
    5. Overman, Henry G. & Xu, Xiaowei, 2024. "Spatial disparities across labour markets," LSE Research Online Documents on Economics 121453, London School of Economics and Political Science, LSE Library.
    6. Feng, Yongqi & Dai, Jiahang & Zhang, Lei, 2025. "Digital infrastructure and income disparities: A quasi-natural experiment based on the "Broadband China" strategy," International Review of Economics & Finance, Elsevier, vol. 102(C).
    7. Yu Wang & Bindong Sun & Sixu Wu & Wan Li & Tinglin Zhang, 2021. "Can the internet reshape the national city size distribution? Cross‐country evidence," Papers in Regional Science, Wiley Blackwell, vol. 100(5), pages 1254-1272, October.
    8. Chen, Hongwen & Cheng, Ken & Zhang, Meiyang, 2023. "Does geographic proximity affect firms’ cross-regional development? Evidence from high-speed rail construction in China," Economic Modelling, Elsevier, vol. 126(C).
    9. Kerui Du & Qilin Huang & Presley K. Wesseh, 2025. "Domestic Pollution Havens: Linking Interregional Capital Flight and Water Pollution Regulation in China," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 88(1), pages 125-161, January.

    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cor:louvrp:3109. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alain GILLIS (email available below). General contact details of provider: https://edirc.repec.org/data/coreebe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.