Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/89330
Authors: 
Bottazzi, Giulio
Dindo, Pietro
Year of Publication: 
2008
Series/Report no.: 
LEM Working Paper Series 2008/11
Abstract: 
Using an analytically solvable equilibrium model, we study how the distribution of economic activities is affected by the trade-off between pecuniary externalities, as dependent on transportation costs, and localized technological externalities, as dependent on inter-regional spillovers. We model localized technological externalities as having a cost saving effect that can be interpreted both as a tangible technological advantage, like the presence of a stronger industrial infrastructure, and as an intangible advantage, like a more efficient labour force composition or the presence of some inter-firms knowledge spillover. Under the assumption of capital mobility and labour immobility, we show that whereas decreasing transportation costs, i.e. promoting market openness, leads to sudden agglomeration, increasing inter-regional spillovers, i.e. promoting technological openness, favors a smoother transition between different levels of firms concentration and ultimately leads to a less uneven distribution of welfare.
Subjects: 
New Economic Geography
Agglomeration
Footloose capital models
Technological externalities
Market and technological openness
JEL: 
F12
F15
R12
O3
Document Type: 
Working Paper

Files in This Item:
File
Size
308.43 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.