Trade Liberalization and the Agglomeration of Heterogeneous Entrepreneurs

15 Pages Posted: 17 Dec 2018

See all articles by Rikard Forslid

Rikard Forslid

Stockholm University; Centre for Economic Policy Research (CEPR)

Toshihiro Okubo

Keio University

Date Written: December 2018

Abstract

This paper introduces spatial sorting of heterogeneous entrepreneurs (firms) in the 'footloose entrepreneur' trade and geography model. The model generates agglomeration from a uniform space contrary to the 'footloose capital' model. The model also generates spatial sorting in reverse productivity order with the least productive entrepreneur being the first to relocate.

Keywords: agglomeration, Heterogeneous Firms, trade liberalization

JEL Classification: F12, F15, R12

Suggested Citation

Forslid, Rikard and Okubo, Toshihiro, Trade Liberalization and the Agglomeration of Heterogeneous Entrepreneurs (December 2018). CEPR Discussion Paper No. DP13381. Available at SSRN: https://ssrn.com/abstract=3302618

Rikard Forslid (Contact Author)

Stockholm University ( email )

Universitetsvägen 10 A
House A, floor 4 and 7
Frescati, Stockholm
Sweden
+46 8 16 3096 (Phone)
+46 8 15 9482 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Toshihiro Okubo

Keio University ( email )

2-15-45 Mita
Minato-ku
Tokyo, 108-8345
Japan

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