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Agglomeration in a global economy: a survey

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  • Ottaviano, Gianmarco I. P.
  • Puga, Diego

Abstract

This review of recent contributions reveals common conclusions about the effects of integration on location. For high trade costs, the need to supply markets locally encourages firms to spread across different regions. Integration weakens the incentives for self-sufficiency and for intermediate values of trade costs pecuniary externalities induce firms and workers to cluster together, turning location into a self-reinforcing process. However, agglomeration raises the price of immobile local factors and goods, so far low transport costs firms may spread to regions where those prices are lower.

Suggested Citation

  • Ottaviano, Gianmarco I. P. & Puga, Diego, 1997. "Agglomeration in a global economy: a survey," LSE Research Online Documents on Economics 20324, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:20324
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    References listed on IDEAS

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    Cited by:

    1. Wolfgang Keller & Ben Li & Carol H Shiue, 2013. "Shanghai's Trade, China's Growth: Continuity, Recovery, and Change since the Opium Wars," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 61(2), pages 336-378, June.
    2. Hanson, Gordon H, 1998. "North American Economic Integration and Industry Location," Oxford Review of Economic Policy, Oxford University Press, vol. 14(2), pages 30-44, Summer.
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    4. Frances Ruane & Anne Marie Gleeson & Julie Sutherland, 2005. "Promoting Industrial Clusters: Evidence from Ireland," The Institute for International Integration Studies Discussion Paper Series iiisdp89, IIIS.
    5. Srinivas, Goli, 2014. "Demographic convergence and its linkage with health inequalities in India," MPRA Paper 79823, University Library of Munich, Germany, revised 05 Dec 2014.
    6. Henry Overman & Stephen Redding & Anthony J. Venables, 2001. "The Economic Geography of Trade, Production, and Income: A Survey of Empirics," CEP Discussion Papers dp0508, Centre for Economic Performance, LSE.
    7. Dominique Peeters & Jacques Thisse & Isabelle Thomas, 1998. "Transportation networks and the location of human activities," ERSA conference papers ersa98p268, European Regional Science Association.

    More about this item

    Keywords

    economic geography; location; agglomeration; integration; migration; linkages;

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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