Transport Costs Decline and Regional Inequalities: Evidence from France

68 Pages Posted: 11 Oct 2001

See all articles by Pierre-Philippe Combes

Pierre-Philippe Combes

Institut d'Etudes Politiques de Paris (Sciences Po) - Department of Economics; Centre for Economic Policy Research (CEPR)

Miren Lafourcade

Paris School of Economics (PSE); University of Paris- Sud 11

Date Written: July 2001

Abstract

This Paper first develops a tractable economic geography model we use to investigate the decline of transport costs as a cause of regional inequalities. Next, we perform a structural estimation of this model using a new dataset on road transport costs between the 341 French Employment Areas. We find that intermediate inputs and geographical features play a critical role in the concentration pattern of French economic activities. Estimations being consistent with plausible values for the structural parameters of the model, we finally provide simulations of French local sectoral employment and production conditions. We find a very strong core-periphery structure of short-run profits, which means that large concentration incentives exist in France. By contrast, a short-run analysis of the impact of a transport costs decline reveals that whereas dispersive forces become prevalent at the country level, agglomeration incentives strenghtens specialization within a large number of the French regions. As regards profits, the emergence of a duo-centric structure confirms such a feature.

Keywords: Economic geography, transport costs, infrastructure, agglomeration

JEL Classification: F10, O10, R30

Suggested Citation

Combes, Pierre-Philippe and Lafourcade, Miren, Transport Costs Decline and Regional Inequalities: Evidence from France (July 2001). Available at SSRN: https://ssrn.com/abstract=285267

Pierre-Philippe Combes (Contact Author)

Institut d'Etudes Politiques de Paris (Sciences Po) - Department of Economics ( email )

28, rue des Saints peres
Paris, 75007
France

HOME PAGE: http://https://www.gate.cnrs.fr/ppcombes

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Miren Lafourcade

Paris School of Economics (PSE)

48 Boulevard Jourdan
Paris, 75014 75014
France

University of Paris- Sud 11 ( email )

15 Rue Georges Clemenceau
Orsay, 91400
France

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
51
Abstract Views
3,543
Rank
721,287
PlumX Metrics