IDEAS home Printed from https://ideas.repec.org/p/zbw/ifwkwp/762.html
   My bibliography  Save this paper

Limits to industrial agglomeration

Author

Listed:
  • Junius, Karsten

Abstract

This paper presents an economic geography model to show the spatial effects of economic integration. While other authors mainly focused on the explanation of cumulative causation effects that lead to complete concentration or absolutely equal dispersion of industries, this paper explains why limits to industrial agglomeration can be observed in reality. It argues that cumulative causation effects can be counterbalanced by further centrifugal forces such as land rents, adverse self-fulfilling expectations and congestion effects. For large scale agglomerations, congestion effects may be the most relevant force that stop a cumulative trend towards complete concentration caused by scale economies and trade costs.

Suggested Citation

  • Junius, Karsten, 1996. "Limits to industrial agglomeration," Kiel Working Papers 762, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:762
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/46880/1/257762817.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fujita, Masahisa & Krugman, Paul, 1995. "When is the economy monocentric?: von Thunen and Chamberlin unified," Regional Science and Urban Economics, Elsevier, vol. 25(4), pages 505-528, August.
    2. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    3. Markusen, James R, 1989. "Trade in Producer Services and in Other Specialized Intermediate Inputs," American Economic Review, American Economic Association, vol. 79(1), pages 85-95, March.
    4. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1989. "Industrialization and the Big Push," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1003-1026, October.
    5. Francisco L. Rivera-Batiz & Luis A. Rivera-Batiz, 2018. "Geography, Trade Patterns, and Economic Policy," World Scientific Book Chapters, in: Francisco L Rivera-Batiz & Luis A Rivera-Batiz (ed.), International Trade, Capital Flows and Economic Development, chapter 7, pages 177-212, World Scientific Publishing Co. Pte. Ltd..
    6. Kiminori Matsuyama, 1991. "Increasing Returns, Industrialization, and Indeterminacy of Equilibrium," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 617-650.
    7. d'Aspremont, Claude & Dos Santos Ferreira, Rodolphe & Gerard-Varet, Louis-Andre, 1996. "On the Dixit-Stiglitz Model of Monopolistic Competition," American Economic Review, American Economic Association, vol. 86(3), pages 623-629, June.
    8. Brezis, Elise S & Krugman, Paul R, 1997. "Technology and the Life Cycle of Cities," Journal of Economic Growth, Springer, vol. 2(4), pages 369-383, December.
    9. Krugman, Paul & Venables, Anthony J, 1990. "Integration and the Competitiveness of Peripheral Industry," CEPR Discussion Papers 363, C.E.P.R. Discussion Papers.
    10. Kyoji Fukao & Roland Benabou, 1993. "History Versus Expectations: A Comment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(2), pages 535-542.
    11. Kanemoto, Yoshitsugu, 1975. "Congestion and cost-benefit analysis in cities," Journal of Urban Economics, Elsevier, vol. 2(3), pages 246-264, July.
    12. Willem Molle & Sjaak Boeckhout, 1995. "Economic Disparity Under Conditions Of Integration — A Long Term View Of The European Case," Papers in Regional Science, Wiley Blackwell, vol. 74(2), pages 105-123, April.
    13. Venables, Anthony J, 1996. "Equilibrium Locations of Vertically Linked Industries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(2), pages 341-359, May.
    14. Yang, Xiaokai & Heijdra, Ben J, 1993. "Monopolistic Competition and Optimum Product Diversity: Comment," American Economic Review, American Economic Association, vol. 83(1), pages 295-301, March.
    15. Sukkoo Kim, 1995. "Expansion of Markets and the Geographic Distribution of Economic Activities: The Trends in U. S. Regional Manufacturing Structure, 1860–1987," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 881-908.
    16. Krugman, Paul & Elizondo, Raul Livas, 1996. "Trade policy and the Third World metropolis," Journal of Development Economics, Elsevier, vol. 49(1), pages 137-150, April.
    17. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Junius, Karsten, 1996. "Economic development and industrial concentration: An inverted U-curve," Kiel Working Papers 770, Kiel Institute for the World Economy (IfW Kiel).
    2. Feng, Wei & Sun, Shujun & Yuan, Hang, 2023. "Research on the efficiency of factor allocation in the pilot free trade zones," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 727-745.
    3. Lammers, Konrad & Stiller, Silvia, 2000. "Regionalpolitische Implikationen Der Neuen Okonomischen Geographie," Discussion Paper Series 26137, Hamburg Institute of International Economics.
    4. Stiller, Silvia, 2000. "European Regional Policy In The Light Of The New Economic Geography," ERSA conference papers ersa00p298, European Regional Science Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Junius, Karsten, 1996. "Economic development and industrial concentration: An inverted U-curve," Kiel Working Papers 770, Kiel Institute for the World Economy (IfW Kiel).
    2. J.Peter Neary, 2001. "Of Hype and Hyperbolas: Introducing the New Economic Geography," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 536-561, June.
    3. G Ottaviano & Diego Puga, 1997. "Agglomeration in a global Economy: A Survey," CEP Discussion Papers dp0356, Centre for Economic Performance, LSE.
    4. Boiscuvier, Éléonore, 2001. "Innovation, intégration et développement régional," L'Actualité Economique, Société Canadienne de Science Economique, vol. 77(2), pages 255-280, juin.
    5. Wrona, Jens & Kreickemeier, Udo, 2016. "Industrialisation and the Big Push in a Global Economy," VfS Annual Conference 2016 (Augsburg): Demographic Change 145707, Verein für Socialpolitik / German Economic Association.
    6. Fabien Candau, 2008. "Entrepreneurs' Location Choice And Public Policies: A Survey Of The New Economic Geography," Journal of Economic Surveys, Wiley Blackwell, vol. 22(5), pages 909-952, December.
    7. Diego Puga, 1996. "Urbanisation Patterns: European vs Less Developed Countries," CEP Discussion Papers dp0305, Centre for Economic Performance, LSE.
    8. Kristian Behrens & Frédéric Robert‐Nicoud, 2009. "Krugman's Papers in Regional Science: The 100 dollar bill on the sidewalk is gone and the 2008 Nobel Prize well‐deserved," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 467-489, June.
    9. Yvonne Wolfmayr-Schnitzer, 2000. "Economic Integration, Specialisation and the Location of Industries. A Survey of the Theoretical Literature," Austrian Economic Quarterly, WIFO, vol. 5(2), pages 73-80, May.
    10. Alberto Franco Pozzolo, 2004. "Research and Development, Regional Spillovers and the Location of Economic Activities," Manchester School, University of Manchester, vol. 72(4), pages 463-482, July.
    11. Gilles Duranton, 1997. "La nouvelle économie géographique : agglomération et dispersion," Économie et Prévision, Programme National Persée, vol. 131(5), pages 1-24.
    12. Pflüger, Michael & Tabuchi, Takatoshi, 2010. "The size of regions with land use for production," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 481-489, November.
    13. Harrison, Ann & Rodríguez-Clare, Andrés, 2010. "Trade, Foreign Investment, and Industrial Policy for Developing Countries," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4039-4214, Elsevier.
    14. Adolfo Cristobal Campoamor & Osiris Jorge Parcero, 2024. "Behind the Eastern-Western European convergence path: the role of geography and trade liberalization," Papers 2401.05107, arXiv.org.
    15. Stephen J. Redding, 2013. "Economic Geography: A Review of the Theoretical and Empirical Literature," Palgrave Macmillan Books, in: Daniel Bernhofen & Rod Falvey & David Greenaway & Udo Kreickemeier (ed.), Palgrave Handbook of International Trade, chapter 16, pages 497-531, Palgrave Macmillan.
    16. Gianmarco Ottaviano & Takatoshi Tabuchi & Jacques-François Thisse, 2021. "Agglomeration And Trade Revisited," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 3, pages 59-85, World Scientific Publishing Co. Pte. Ltd..
    17. J. Peter Neary, 2000. "Monopolistic Competition and International Trade Theory," Working Papers 200025, School of Economics, University College Dublin.
    18. Ciccone, Antonio & Matsuyama, Kiminori, 1996. "Start-up costs and pecuniary externalities as barriers to economic development," Journal of Development Economics, Elsevier, vol. 49(1), pages 33-59, April.
    19. Rodrik, Dani, 1996. "Coordination failures and government policy: A model with applications to East Asia and Eastern Europe," Journal of International Economics, Elsevier, vol. 40(1-2), pages 1-22, February.
    20. José M. Gaspar, 2018. "A prospective review on New Economic Geography," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 61(2), pages 237-272, September.

    More about this item

    Keywords

    Economic Geography; Agglomeration; Congestion; Location Theory;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:ifwkwp:762. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/iwkiede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.