Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/101515
Authors: 
Ricci, Luca Antonio
Year of Publication: 
1996
Series/Report no.: 
Diskussionsbeiträge: Serie II, Sonderforschungsbereich 178 "Internationalisierung der Wirtschaft", Universität Konstanz 321
Abstract: 
This paper investigates the relation between agglomeration of economic activity and the pattern of specialization of countries. We develop a model encompassing a Ricardian comparative advantage, increasing returns to scale, product differentiation, monopolistic competition, trade costs, and factor mobility. Several interesting results arise. An endogenous relative increase in the size of one country makes this country less specialized in the homogeneous constant returns commodity and more specialized in the differentiated increasing returns IRS sectors; within the IRS industry, this country will become less specialized in the differentiated good in which it has a comparative advantage. Agglomeration occurs not only in large markets, but also in locations with a high average efficiency in the increasing return industry. Ceteris paribus, comparative advantage drives specialization, while absolute advantage drives agglomeration.
Subjects: 
Agglomeration
Specialization
Ricardian comparative advantage
Monopolistic competition
Scale economies
Location
JEL: 
F11
F12
F15
L13
R12
Document Type: 
Working Paper

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