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What Determines the Economic Geography of Europe?


  • Haaland, Jan I.
  • Kind, Hans Jarle
  • Ulltveit-Moe, Karen-Helene


This paper focuses on what the driving forces behind industry localisation in Europe are. Based on traditional as well as new trade theory and new economic geography our cross-sectoral empirical analysis seeks to explain the pattern of relative and absolute concentration of manufacturing activity. By comparing impact over time, we also consider whether the single market has had an influence on factors determining localisation. The results indicate that the by far most important determinant of economic geography in Europe is localisation of demand. There is also evidence of cumulative causation in the sense that absolute concentration of production and expenditure mutually influence each other.

Suggested Citation

  • Haaland, Jan I. & Kind, Hans Jarle & Ulltveit-Moe, Karen-Helene, 1999. "What Determines the Economic Geography of Europe?," CEPR Discussion Papers 2072, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:2072

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    More about this item


    Agglomeration; Comparative Advantage; Economic Geography; Industrial Localization;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration


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