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Agglomeration of Low-productive Entrepreneurs to Large Regions: A Simple Model

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  • Rikard FORSLID
  • OKUBO Toshihiro

Abstract

This paper develops a simple model of spatial sorting where the least productive entrepreneurs are drawn to the large core region. This is an unusual feature. The literature on spatial sorting typically shows how the most productive individuals and firms agglomerate to the core. However, our model is consistent with data that reveals that large agglomerations also attract unproductive entrepreneurs.

Suggested Citation

  • Rikard FORSLID & OKUBO Toshihiro, 2019. "Agglomeration of Low-productive Entrepreneurs to Large Regions: A Simple Model," Discussion papers 19102, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:19102
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