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Trade Liberalization and the Agglomeration of Heterogeneous Entrepreneurs

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  • Forslid, Rikard
  • Okubo, Toshihiro

Abstract

This paper introduces spatial sorting of heterogeneous entrepreneurs (firms) in the 'footloose entrepreneur' trade and geography model. The model generates agglomeration from a uniform space contrary to the 'footloose capital' model. The model also generates spatial sorting in reverse productivity order with the least productive entrepreneur being the first to relocate.

Suggested Citation

  • Forslid, Rikard & Okubo, Toshihiro, 2018. "Trade Liberalization and the Agglomeration of Heterogeneous Entrepreneurs," CEPR Discussion Papers 13381, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:13381
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    More about this item

    Keywords

    Agglomeration; Heterogeneous firms; Trade liberalization;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration
    • 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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