This paper presents a theoretical framework to study the effects of geographical factors on the distribution of industries in the world econmy, which consists of many regions. The geographical feature of each region is summarized by a proximity matrix, whose elements measure the closeness between every pair of regions, and depend on the parameters representing the transport and other costs of using a variety of trade routes. The main objective is to show how a change in these costs of trade affects the distribution of industries, by amplifying the geographical advantages and disadvantages held by different regions. The results are used not only to examine the effects of an improvement in transport infrastructure, but also to discuss some problems from economic history (mostly Japanese and European), regional economic integration, the nort-south division, and others.
A Multiregion Model of Trade with Increasing Returns and Transport Costs REgional Economic Integration Uneven Development Geography Locational Advantages and Disadvantages Proximity Matrix Trade Routes