Modeling services sectors' agglomeration within a new economic geography model
This study investigates whether services sectors' agglomeration can be explained within a common New Economic Geography model by Krugman and Venables (1996). Special feature of this modeling is to account for the lower importance of intermediate goods received for the services sector, a fact that has been shown in Empirics for the European Union (Krenz (2010)). The results show different strengths of agglomeration for both the industrial and services sector depending on initial values of strength of intra-sectoral and inter-sectoral inputs, consumers' preferences, scale economies and transport costs. The lower extent of services sectors' agglomeration seen in Empirics can be explained within the model.
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- Krugman, Paul & Venables, Anthony J, 1994.
"Globalization and the Inequality of Nations,"
CEPR Discussion Papers
1015, C.E.P.R. Discussion Papers.
- Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," NBER Working Papers 5098, National Bureau of Economic Research, Inc.
- Krugman, Paul & Venables, Anthony J., 1995. "Globalization and the Inequality of Nations," Working Paper Series 430, Research Institute of Industrial Economics.
- Paul Krugman, 1990.
"Increasing Returns and Economic Geography,"
NBER Working Papers
3275, National Bureau of Economic Research, Inc.
- Krenz, Astrid, 2010. "Services sectors' agglomeration and its interdependence with industrial agglomeration in the European Union," Center for European, Governance and Economic Development Research Discussion Papers 107, University of Goettingen, Department of Economics.
- Sascha Frohwerk, 2008. "Das Cluster-Modell bei sektoral unterschiedlichen Transportkosten," Volkswirtschaftliche Diskussionsbeiträge 97, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät.
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