Timeliness, Trade and Agglomeration
An important element of the cost of distance is time taken in delivering final and intermediate goods. We argue that time costs are qualitatively different from direct monetary costs such as freight charges. The difference arises because of uncertainty. Unsynchronised deliveries can disrupt production, and delivery time can force producers to order components before demand and cost uncertainties are resolved. Using several related models we show that this generates hitherto unexplored incentives for clustering. If final assembly takes place in two locations and component production has increasing returns to scale, then component production will tend to cluster around just one of the assembly plants.
|Date of creation:||Apr 2004|
|Date of revision:|
|Publication status:||published as Harrigan, James and Anthony J. Venables. “Timeliness and Agglomeration.” Journal of Urban Economics 59 (March 2006): 300-316.|
|Contact details of provider:|| Postal: |
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kremer, Michael, 1993. "The O-Ring Theory of Economic Development," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 551-75, August.
- Edward E. Leamer & Michael Storper, 2001.
"The Economic Geography of the Internet Age,"
NBER Working Papers
8450, National Bureau of Economic Research, Inc.
- Anthony Venables, 2001.
"Geography and International Inequalities: The Impact of New Technologies,"
Journal of Industry, Competition and Trade,
Springer, vol. 1(2), pages 135-159, June.
- Anthony J. Venables, 2001. "Geography and International Inequalities: the Impact of New Technologies," CEP Discussion Papers dp0507, Centre for Economic Performance, LSE.
- Carolyn L. Evans & James Harrigan, 2003.
"Distance, Time, and Specialization,"
NBER Working Papers
9729, National Bureau of Economic Research, Inc.
- James Harrigan & Carolyn Evans, 2004. "Distance, Time and Specialization," Econometric Society 2004 North American Winter Meetings 640, Econometric Society.
- Carolyn Evans & James Harrigan, 2003. "Distance, time, and specialization," International Finance Discussion Papers 766, Board of Governors of the Federal Reserve System (U.S.).
- Sutton, John, 1986. "Non-cooperative Bargaining Theory: An Introduction," Review of Economic Studies, Wiley Blackwell, vol. 53(5), pages 709-24, October.
- Thomas H. Klier, 1999. "Agglomeration in the U.S. auto supplier industry," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q I, pages 18-34.
- Hummels, David, 2001.
"Time as a Trade Barrier,"
GTAP Working Papers
1152, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
- Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," 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 49, pages 2119-2171 Elsevier.
- Cremer, Jacques, 1995. "Towards an economic theory of incentives in just-in-time manufacturing," European Economic Review, Elsevier, vol. 39(3-4), pages 432-439, April.
- Michael Storper & Anthony J. Venables, 2003.
"Buzz: Face-to-Face Contact and the Urban Economy,"
CEP Discussion Papers
dp0598, Centre for Economic Performance, LSE.
- Rosenthal, Stuart S. & Strange, William C., 2001. "The Determinants of Agglomeration," Journal of Urban Economics, Elsevier, vol. 50(2), pages 191-229, September.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:10404. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.