Trade and industrial location with heterogeneous labor
We show in the context of a new economic geography model that when labor is heterogenous trade liberalization may lead to industrial agglomeration and inter-regional trade. Labor heterogeneity gives local monopoly power to firms but also introduces variations in the quality of the job match. Matches are likely to be better when there are more firms and workers in the local market, giving rise to an agglomeration force which can offset the forces against, trade costs and the erosion of monopoly power. We derive analytically a robust agglomeration equilibrium and illustrate its properties with numerical simulations.
|Date of creation:||Dec 2005|
|Date of revision:|
|Publication status:||Published in Journal of International Economics, December, 2005, 67(2), pp. 392-412. ISSN: 0022-1996|
|Contact details of provider:|| Postal: |
Phone: +44 (020) 7405 7686
Web page: http://www.lse.ac.uk/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paul Krugman & Anthony J. Venables, 1995.
"Globalization and the Inequality of Nations,"
NBER Working Papers
5098, National Bureau of Economic Research, Inc.
- Krugman, Paul & Venables, Anthony J., 1995. "Globalization and the Inequality of Nations," Working Paper Series 430, Research Institute of Industrial Economics.
- Krugman, Paul & Venables, Anthony J, 1994. "Globalization and the Inequality of Nations," CEPR Discussion Papers 1015, C.E.P.R. Discussion Papers.
- Barbara Petrongolo & Christopher Pissarides, 2006.
"Scale Effects in Markets with Search,"
Royal Economic Society, vol. 116(508), pages 21-44, 01.
- Barbara Petrongolo & Christopher Pissarides, 2006. "Scale effects in markets with search," LSE Research Online Documents on Economics 2467, London School of Economics and Political Science, LSE Library.
- Petrongolo, Barbara & Pissarides, Christopher A., 2003. "Scale Effects in Markets with Search," IZA Discussion Papers 691, Institute for the Study of Labor (IZA).
- B Petrongolo & Christopher Pissarides, 2003. "Scale effects in markets with search," LSE Research Online Documents on Economics 2248, London School of Economics and Political Science, LSE Library.
- Barbara Petrongolo & Christopher A. Pissarides, 2003. "Scale Effects in Markets with Search," CEP Discussion Papers dp0571, Centre for Economic Performance, LSE.
- Petrongolo, Barbara & Pissarides, Christopher, 2002. "Scale Effects in Markets with Search," CEPR Discussion Papers 3648, C.E.P.R. Discussion Papers.
- THISSE, Jacques-François & ZENOU, Yves, .
"Skill mismatch and unemployment,"
CORE Discussion Papers RP
-1480, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Paul Krugman, 1992. "Geography and Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262610868, June.
- Coen N. Teulings & P.A. Gautier, 2002. "Search and the City," Tinbergen Institute Discussion Papers 02-061/3, Tinbergen Institute.
- Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, June.
- repec:dgr:uvatin:20020061 is not listed on IDEAS
- Julio J. Rotemberg & Garth Saloner, 1990.
"Competition and Human Capital Accumulation: A Theory of Interregional Specialization and Trade,"
NBER Working Papers
3228, National Bureau of Economic Research, Inc.
- Rotemberg, Julio J. & Saloner, Garth, 2000. "Competition and human capital accumulation: a theory of interregional specialization and trade," Regional Science and Urban Economics, Elsevier, vol. 30(4), pages 373-404, July.
- Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
- Andersson, Fredrik & Burgess, Simon & Lane, Julia I., 2007.
"Cities, matching and the productivity gains of agglomeration,"
Journal of Urban Economics,
Elsevier, vol. 61(1), pages 112-128, January.
- Fredrik Andersson & Simon Burgess & Julia Lane, 2004. "Cities, Matching and the Productivity Gains of Agglomeration," CEP Discussion Papers dp0648, Centre for Economic Performance, LSE.
- Andersson, Fredrik & Burgess, Simon & Lane, Julia, 2004. "Cities, Matching and the Productivity Gains of Agglomeration," CEPR Discussion Papers 4598, C.E.P.R. Discussion Papers.
- Guy Dumais & Glenn Ellison & Edward L Glaeser, 1998.
"Geographic Concentration as a Dynamic Process,"
98-3, Center for Economic Studies, U.S. Census Bureau.
- Mary Amiti & Lisa Ann Cameron, 2004. "Economic Geography and Wages; The Case of Indonesia," IMF Working Papers 04/79, International Monetary Fund.
- Lisa A. Cameron & Mary Amiti, 2004.
"Economic Geography and Wages,"
Econometric Society 2004 Australasian Meetings
253, Econometric Society.
- Sato, Yasuhiro, 2001. "Labor Heterogeneity in an Urban Labor Market," Journal of Urban Economics, Elsevier, vol. 50(2), pages 313-337, September.
- d'Aspremont, C & Gabszewicz, Jean Jaskold & Thisse, J-F, 1979.
"On Hotelling's "Stability in Competition","
Econometric Society, vol. 47(5), pages 1145-50, September.
- Economides, Nicholas, 1989. "Symmetric equilibrium existence and optimality in differentiated product markets," Journal of Economic Theory, Elsevier, vol. 47(1), pages 178-194, February.
- Helsley, Robert W. & Strange, William C., 1990. "Matching and agglomeration economies in a system of cities," Regional Science and Urban Economics, Elsevier, vol. 20(2), pages 189-212, September.
- repec:dgr:uvatin:2002061 is not listed on IDEAS
- Rosenthal, Stuart S. & Strange, William C., 2001. "The Determinants of Agglomeration," Journal of Urban Economics, Elsevier, vol. 50(2), pages 191-229, September.
When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:2475. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (LSERO Manager)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.