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Regional Specialization and Transport Costs

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  • Tabuchi, Takatoshi
  • Thisse, Jacques-François

Abstract

We consider an economic geography model in which all firms and workers are mobile, but the agglomeration of firms and workers within a region generates urban costs. We show that industries with high transport costs tend to be more agglomerated than industries with low transport costs. This is to be contrasted to the result obtained in the one-industry case in which agglomeration arises for low transport costs. We also show that firms supplying non-tradable consumer services are more agglomerated than firms belonging to light industries. In this case, the equilibrium involves an urban hierarchy: for each good, a larger array of varieties is produced within the same city.

Suggested Citation

  • Tabuchi, Takatoshi & Thisse, Jacques-François, 2002. "Regional Specialization and Transport Costs," CEPR Discussion Papers 3542, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:3542
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    References listed on IDEAS

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    Cited by:

    1. Ottaviano, Gianmarco & Thisse, Jacques-Francois, 2004. "Agglomeration and economic geography," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 58, pages 2563-2608, Elsevier.
    2. Bottasso, Anna & Conti, Maurizio & Ferrari, Claudio & Tei, Alessio, 2014. "Ports and regional development: A spatial analysis on a panel of European regions," Transportation Research Part A: Policy and Practice, Elsevier, vol. 65(C), pages 44-55.
    3. Cerina, Fabio & Mureddu, Francesco, 2014. "Is agglomeration really good for growth? Global efficiency, interregional equity and uneven growth," Journal of Urban Economics, Elsevier, vol. 84(C), pages 9-22.
    4. G.A. Minerva, 2006. "Natural Advantage, Location and Trade Patterns in Increasing Returns to Scale Industries," Working Papers 560, Dipartimento Scienze Economiche, Universita' di Bologna.
    5. Kristian Behrens, 2003. "Trade is not necessary for agglomeration to arise," Working Papers hal-01526534, HAL.
    6. Pfluger, Michael & Takatoshi Tabuchi, 2008. "Trade and Location with Land as a Productive Factor," CIRJE F-Series CIRJE-F-591, CIRJE, Faculty of Economics, University of Tokyo.
    7. César Ducruet & Hidekazu Itoh & Olivier Joly, 2015. "Ports and the local embedding of commodity flows," Papers in Regional Science, Wiley Blackwell, vol. 94(3), pages 607-627, August.
    8. Behrens, Kristian, 2004. "Agglomeration without trade: how non-traded goods shape the space-economy," Journal of Urban Economics, Elsevier, vol. 55(1), pages 68-92, January.
    9. Kristian Behrens, 2003. "International trade and internal geography revisited," Working Papers hal-01526511, HAL.
    10. Joeri Gorter & Albert Van der Horst, 2005. "New Economic Geography, Empirics, and Regional Policy," ERSA conference papers ersa05p236, European Regional Science Association.
    11. César Ducruet & Hidekazu Itoh, 2016. "Regions and material flows: investigating the regional branching and industry relatedness of port traffics in a global perspective," Journal of Economic Geography, Oxford University Press, vol. 16(4), pages 805-830.
    12. Tabuchi, Takatoshi & Thisse, Jacques-François & Zeng, Dao-Zhi, 2002. "On the Number and Size of Cities," CEPR Discussion Papers 3386, C.E.P.R. Discussion Papers.
    13. Kristian Behrens, 2005. "Choix de localisation et structure du commerce intra-branche," Revue économique, Presses de Sciences-Po, vol. 56(4), pages 965-982.
    14. P. Commendatore & I. Kubin & I. Sushko, 2021. "Obtaining a hub position: A New Economic Geography analysis of industry location and trade network structures," Metroeconomica, Wiley Blackwell, vol. 72(1), pages 148-172, February.

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    More about this item

    Keywords

    agglomeration; interregional mobility; intersectoral mobility; transport costs; urban costs;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • 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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