Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/259908 
Authors: 
Year of Publication: 
2005
Series/Report no.: 
Working Paper No. 2005:23
Publisher: 
Lund University, School of Economics and Management, Department of Economics, Lund
Abstract: 
We analyse a two-stage location-quantity game with many firms and two regions. We show that the firms will never agglomerate in the same location if transportation is costly between the regions. We also analyse the effects of differences in market size and economic integration on the allocation of industrial activity. For high levels of trade costs firms locate in different regions. Lowering the trade costs beyond a critical level triggers an agglomeration of industry in the larger region. This process of agglomeration is gradual in nature and trade costs have to be successively lowered for a full-scale agglomeration to take place.
Subjects: 
agglomeration
cross-hauling
market size effects
spatial Cournot competition
JEL: 
D43
F12
L13
R30
Document Type: 
Working Paper

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