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First nature vs. second nature causes: industry location and growth in the presence of an open-access renewable resource

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  • Rafael González-Val

    () (Universitat de Barcelona & IEB)

  • Fernando Pueyo

    () (Universidad de Zaragoza)

Abstract

In this paper we present a model integrating characteristics of the New Economic Geography, the theory of endogenous growth and the economy of natural resources. This theoretical framework enables us to study explicitly the effect of “first nature causes” in the concentration of economic activity, more specifically, the consequences of an asymmetrical distribution of natural resources. The natural resource we consider appears as a localized input in one of the two countries, giving firms located in that country a cost advantage. In this context, after a decrease in transport costs, firms decide to move to the country with the greatest domestic demand and market size, where they can take more advantage of increasing returns, despite the cost advantage of locating in the South, due to the presence of the natural resource.

Suggested Citation

  • Rafael González-Val & Fernando Pueyo, 2010. "First nature vs. second nature causes: industry location and growth in the presence of an open-access renewable resource," Working Papers 2010/39, Institut d'Economia de Barcelona (IEB).
  • Handle: RePEc:ieb:wpaper:2010/10/doc2010-39
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    References listed on IDEAS

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    Cited by:

    1. David Cuberes & Rafael González-Val, 2017. "The effect of the Spanish Reconquest on Iberian cities," The Annals of Regional Science, Springer;Western Regional Science Association, pages 375-416.
    2. Rafael Gonzalez-Val & David Cuberes, 2013. "History and Urban Primacy: The Effect of the Spanish Reconquista on Muslim Cities," ERSA conference papers ersa13p60, European Regional Science Association.

    More about this item

    Keywords

    Industrial location; endogenous growth; renewable resource; geography;

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • 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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