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Economic Centrality: How Much is Economics and How Much is Geography?

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  • Nuno Crespo
  • M. Paula Fontoura
  • Nadia Simoes

Abstract

Proximity to the markets is a key determinant of the location of firms because distance still matters, as recently reported in the literature. In this paper, based on an adapted version of the most standard centrality index we propose a decomposition method which allows isolating the influence of: (i) internal and external factors; (ii) economic and geographical aspects. In order to illustrate our methodology, we consider data for 171 countries. This empirical example leads to the conclusion that the centrality level of the countries derives from different sources, requiring therefore different policy interventions in order to improve it.

Suggested Citation

  • Nuno Crespo & M. Paula Fontoura & Nadia Simoes, 2014. "Economic Centrality: How Much is Economics and How Much is Geography?," Working Papers Department of Economics 2014/09, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
  • Handle: RePEc:ise:isegwp:wp092014
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    More about this item

    Keywords

    gcentrality; peripherality; economic geography; distance.;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F68 - International Economics - - Economic Impacts of Globalization - - - Policy
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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