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A Harmonization of First and Second Natures

  • Pierre M. Picard
  • Dao-Zhi Zeng

    ()

    (CREA, University of Luxembourg)

This paper investigates the joint impact of the first nature and the second nature forces on industry location. Towards this aim, we develop a two-region new economic geography model where local factor congestion and location advantages compete with demand linkages and product market crowding. In particular we study the case of absolute location advantage in a single industry model and the case of comparative advantages in a two-industry model. We characterize the structure of industries and discuss the possibilities of catastrophic changes, endogenous industrial asymmetries and specialization. We find that absolute location advantage are associated with a smooth agglomeration process and comparative advantages with a catastrophic process.

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File URL: http://wwwen.uni.lu/content/download/23998/291661/file/2009-10_A%20Harmonization%20of%20First%20and%20Second%20Natures.pdf
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Paper provided by Center for Research in Economic Analysis, University of Luxembourg in its series CREA Discussion Paper Series with number 09-10.

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Date of creation: 2009
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Handle: RePEc:luc:wpaper:09-10
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  1. K.H. Midelfart & H.G. Overman & S.J. Redding & A.J. Venables, 2000. "The location of European industry," European Economy - Economic Papers 142, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
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  10. PICARD, Pierre & ZENG, Dao-Zhi, 2003. "Agricultural sector and industrial agglomeration," CORE Discussion Papers 2003022, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  11. TABUCHI, Takahoshi & THISSE, Jacques-François, . "Regional specialization, urban hierarchy, and commuting costs," CORE Discussion Papers RP 1967, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  15. Brülhart, Marius & Trionfetti, Federico, 2001. "Industrial Specialisation and Public Procurement: Theory and Empirical Evidence," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 16, pages 106-127.
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  20. Donald R. Davis & David E. Weinstein, 2001. "Bones, Bombs and Break Points: The Geography of Economic Activity," NBER Working Papers 8517, National Bureau of Economic Research, Inc.
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  22. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  23. Edward L. Glaeser & Glenn Ellison, 1999. "The Geographic Concentration of Industry: Does Natural Advantage Explain Agglomeration?," American Economic Review, American Economic Association, vol. 89(2), pages 311-316, May.
  24. Amiti, Mary, 1998. "Inter-industry trade in manufactures: Does country size matter?," Journal of International Economics, Elsevier, vol. 44(2), pages 231-255, April.
  25. PICARD, Pierre M. & ZENG, Dao-Zhi, 2006. "Industrial location : a synthesis of Chamberlin and Ricardo," CORE Discussion Papers 2006055, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  26. Takatoshi Tabuchi & Dao-Zhi Zeng, 2000. "Stability of Spatial Equilibrium," CIRJE F-Series CIRJE-F-79, CIRJE, Faculty of Economics, University of Tokyo.
  27. Tabuchi, Takatoshi, 1998. "Urban Agglomeration and Dispersion: A Synthesis of Alonso and Krugman," Journal of Urban Economics, Elsevier, vol. 44(3), pages 333-351, November.
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