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Puga, Diego
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[Journal:] EIB Papers [ISSN:] 0257-7755 [Volume:] 13 [Year:] 2008 [Issue:] 2 [Pages:] 102-124
This paper deals with the effects of cross-border transport infrastructure in the presence of agglomeration economies. Cross-border infrastructure is more likely to increase than to decrease inequalities between and within regions, and has not helped regional convergence in Europe. Under-investment due to spillovers, coordination failures, and the inadequacy of networks originally designed for national markets provide a role for supranational institutions. Hub-and-spoke networks tend to increase urban primacy while cross-border transport connections tend to reduce it. Improvements in transport and communication allow firms to separate innovation, management and production, increasing efficiency and urban interdependence.
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