IDEAS home Printed from https://ideas.repec.org/p/hok/dpaper/242.html

A Chamberlinian Agglomeration Model with External Economies of Scale

Author

Listed:
  • Kurata, Hiroshi
  • Nomura, Ryoichi
  • Suga, Nobuhito

Abstract

We investigate the effects of a reduction in trade costs on industrial location and welfare in an economy with external economies of scale. We propose a Chamberlinian agglomeration model with footloose capital, which is analytically-solvable. With respect to industrial location, we demonstrate that a reduction in trade cost is likely to lead to agglomeration. With respect to welfare, we show that agglomeration makes a country with agglomeration better off, and the country without agglomeration better or worse off, depending on the degree of external economies of scale. We also prove that agglomeration makes the overall economy better off.

Suggested Citation

  • Kurata, Hiroshi & Nomura, Ryoichi & Suga, Nobuhito, 2011. "A Chamberlinian Agglomeration Model with External Economies of Scale," Discussion paper series. A 242, Graduate School of Economics and Business Administration, Hokkaido University.
    • Handle: RePEc:hok:dpaper:242
    as

    Download full text from publisher

    File URL: https://hdl.handle.net/2115/46972
    Download Restriction: no
    File URL: https://eprints.lib.hokudai.ac.jp/repo/huscap/all/46972/DPA242_new.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Richard Baldwin & Rikard Forslid & Philippe Martin & Gianmarco Ottaviano & Frederic Robert-Nicoud, 2005. "Economic Geography and Public Policy," Economics Books, Princeton University Press, edition 1, number 7524.
    2. Amiti, Mary, 2005. "Location of vertically linked industries: agglomeration versus comparative advantage," European Economic Review, Elsevier, vol. 49(4), pages 809-832, May.
    3. Behrens, Kristian & Gaigne, Carl & Ottaviano, Gianmarco I.P. & Thisse, Jacques-Francois, 2007. "Countries, regions and trade: On the welfare impacts of economic integration," European Economic Review, Elsevier, vol. 51(5), pages 1277-1301, July.
    4. Pfluger, Michael, 2004. "A simple, analytically solvable, Chamberlinian agglomeration model," Regional Science and Urban Economics, Elsevier, vol. 34(5), pages 565-573, September.
    5. Rikard Forslid & Gianmarco I.P. Ottaviano, 2003. "An analytically solvable core-periphery model," Journal of Economic Geography, Oxford University Press, vol. 3(3), pages 229-240, July.
    6. Suga, Nobuhito, 2007. "A monopolistic-competition model of international trade with external economies of scale," The North American Journal of Economics and Finance, Elsevier, vol. 18(1), pages 77-91, February.
    7. Martin, Philippe & Rogers, Carol Ann, 1995. "Industrial location and public infrastructure," Journal of International Economics, Elsevier, vol. 39(3-4), pages 335-351, November.
    8. Pflüger, Michael & Südekum, Jens, 2008. "Integration, agglomeration and welfare," Journal of Urban Economics, Elsevier, vol. 63(2), pages 544-566, March.
    9. Charlot, Sylvie & Gaigne, Carl & Robert-Nicoud, Frederic & Thisse, Jacques-Francois, 2006. "Agglomeration and welfare: The core-periphery model in the light of Bentham, Kaldor, and Rawls," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 325-347, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    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. Kristian Behrens & Frédéric Robert‐Nicoud, 2009. "Krugman's Papers in Regional Science: The 100 dollar bill on the sidewalk is gone and the 2008 Nobel Prize well‐deserved," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 467-489, June.
    3. Fabien Candau, 2008. "Entrepreneurs' Location Choice And Public Policies: A Survey Of The New Economic Geography," Journal of Economic Surveys, Wiley Blackwell, vol. 22(5), pages 909-952, December.
    4. Maria Florencia Granato, 2011. "REGIONAL NEW ECONOMIC GEOGRAPHY (refereed paper)," ERSA conference papers ersa10p747, European Regional Science Association.
    5. Stef Proost & Jacques-François Thisse, 2019. "What Can Be Learned from Spatial Economics?," Journal of Economic Literature, American Economic Association, vol. 57(3), pages 575-643, September.
    6. Marius Brülhart, 2011. "The spatial effects of trade openness: a survey," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(1), pages 59-83, April.
    7. Egle Tafenau, 2011. "The effects of regional subsidies to the spatial distribution of economic activity and welfare in the constructed capital model," ERSA conference papers ersa10p1182, European Regional Science Association.
    8. Yiming Zhou, 2019. "Home market effect, land rent, and welfare," Asia-Pacific Journal of Regional Science, Springer, vol. 3(2), pages 561-580, June.
    9. Behrens, Kristian & Gaigne, Carl & Ottaviano, Gianmarco I.P. & Thisse, Jacques-Francois, 2007. "Countries, regions and trade: On the welfare impacts of economic integration," European Economic Review, Elsevier, vol. 51(5), pages 1277-1301, July.
    10. Bagoulla, Corinne & Péridy, Nicolas, 2011. "Market access and the other determinants of North–South manufacturing location choice: An application to the Euro-Mediterranean area," Economic Systems, Elsevier, vol. 35(4), pages 537-561.
    11. Toshihiro Atsumi, 2017. "Agglomeration under money illusion," Economics Bulletin, AccessEcon, vol. 37(4), pages 2962-2969.
    12. Paul Chiambaretto & André De Palma & Stef Proost, 2013. "A normative analysis of transport policies in a footloose capital model with interregional and intraregional transportation costs," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(3), pages 811-831, December.
    13. Thisse, Jacques-François & Proost, Stef, 2015. "Skilled Cities, Regional Disparities, and Efficient Transport: The state of the art and a research agenda," CEPR Discussion Papers 10790, C.E.P.R. Discussion Papers.
    14. Juan Labraga, 2009. "Política Comercial y Política de Infraestructura en el MERCOSUR," IDB Publications (Working Papers) 9328, Inter-American Development Bank.
    15. Rainald Borck & Michael Pflüger & Matthias Wrede, 2010. "A simple theory of industry location and residence choice," Journal of Economic Geography, Oxford University Press, vol. 10(6), pages 913-940, November.
    16. Yiming Zhou, 2025. "Industrial agglomeration, firm heterogeneity, and environmental pollution," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 24(3), pages 393-418, September.
    17. repec:rza:wpaper:237 is not listed on IDEAS
    18. Fabien Candau & Michaël Goujon & Jean-François Hoarau & Serge Rey, 2014. "Real exchange rate and competitiveness of an EU's ultra-peripheral region: La Reunion Island," International Economics, CEPII research center, issue 137, pages 1-21.
    19. Ulltveit-Moe, Karen Helene, 2007. "Regional policy design: An analysis of relocation, efficiency and equity," European Economic Review, Elsevier, vol. 51(6), pages 1443-1467, August.
    20. Fabien Candau, 2011. "Is Agglomeration Desirable?," Annals of Economics and Statistics, GENES, issue 101-102, pages 203-227.
    21. d’Artis Kancs, 2006. "The economic geography of labour migration: Competition, competitiveness and development," EERI Research Paper Series EERI_RP_2006_01, Economics and Econometrics Research Institute (EERI), Brussels.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hok:dpaper:242. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hokkaido University Library (email available below). General contact details of provider: https://edirc.repec.org/data/fehokjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.