Agglomeration in a Core-Periphery Model with Vertically and Horizontally Integrated Firms
This paper analyses the effect of allowing for a more general production structure in the core-periphery (CP) model. Two special cases of fully horizontally- and vertically-integrated firms are treated. The case of horizontally-integrated firms is a counter-example to the strong agglomeration effects found in the CP model. A symmetric equilibrium will always be stable and hence agglomeration is prevented. The introduction of vertically-integrated firms that can separate the location of headquarter activities from the location of production, has two effects. First, it tends to break the symmetry of the original CP model and thus lead to more agglomeration. Second, it also tends to decrease the parameter space in which full agglomeration occurs, and therefore leads to less agglomeration.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
|Date of creation:||Mar 1997|
|Contact details of provider:|| Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.|
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |