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The location of manufacturing firms and imperfect information in transport market

  • Gokan, Toshitaka
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    It is well know that transport charges are not symmetric: fronthaul and backhaul costs on a route may differ, because they are affected by the distribution of economic acitivities. This paper develops a two-regional general equilibrium model in which transport costs are determined endogenously as a result of a search and matching process. It is shown that economies or diseconomies of transport density emerge, depending on the search costs of transport firms and the relative importance of the possibility of backhaul transportation. It is found that the symmetry of the distribution of economic activity may break owing to economies of transport density when the additional search costs are small enough.

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    File URL: http://ir.ide.go.jp/dspace/bitstream/2344/1227/1/ARRIDE_Discussion_No.398_gokan.pdf
    File Function: First version, 2013
    Download Restriction: no

    Paper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number 398.

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    Date of creation: Mar 2013
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    Publication status: Published in IDE Discussion Paper. No. 398. 2013.3
    Handle: RePEc:jet:dpaper:dpaper398
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    1. Wolinsky, Asher, 1986. "True Monopolistic Competition as a Result of Imperfect Information," The Quarterly Journal of Economics, MIT Press, vol. 101(3), pages 493-511, August.
    2. Behrens, Kristian & Gaigné, Carl & Thisse, Jacques-François, 2009. "Industry location and welfare when transport costs are endogenous," Journal of Urban Economics, Elsevier, vol. 65(2), pages 195-208, March.
    3. Takahashi, Takaaki, 2006. "Economic geography and endogenous determination of transport technology," Journal of Urban Economics, Elsevier, vol. 60(3), pages 498-518, November.
    4. BEHRENS, Kristian & GAIGNE, Carl & OTTAVIANO, Gianmarco I.P. & THISSE, Jacques-François, . "How density economies in international transportation link the internal geography of trading partners," CORE Discussion Papers RP 1870, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. North, Douglass, 1958. "Ocean Freight Rates and Economic Development 1730-1913," The Journal of Economic History, Cambridge University Press, vol. 18(04), pages 537-555, December.
    6. Asher Wolinsky, 1983. "Retail Trade Concentration Due to Consumers' Imperfect Information," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 275-282, Spring.
    7. repec:ebl:ecbull:v:18:y:2006:i:5:p:1-7 is not listed on IDEAS
    8. Carl Gaigne & Kristian Behrens, 2006. "Density (dis)economies in transportation: revisiting the core-periphery model," Economics Bulletin, AccessEcon, vol. 18(5), pages 1-7.
    9. Richard Baldwin & Rikard Forslid & Philippe Martin & Gianmarco Ottaviano & Frederic Robert Nicoud, 2003. "Economic Geography and Public Policy," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00179815, HAL.
    10. De Vany, Arthur S & Saving, Thomas R, 1977. "Product Quality, Uncertainty, and Regulation: The Trucking Industry," American Economic Review, American Economic Association, vol. 67(4), pages 583-94, September.
    11. Behrens, Kristian & Gaigne, Carl & Ottaviano, Gianmarco I.P. & Thisse, Jacques-Francois, 2006. "How density economies in international transportation link the internal geography of trading partners," Journal of Urban Economics, Elsevier, vol. 60(2), pages 248-263, September.
    12. Takahashi, Takaaki, 2011. "Directional imbalance in transport prices and economic geography," Journal of Urban Economics, Elsevier, vol. 69(1), pages 92-102, January.
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