Regional Specialization and Transport Costs

35 Pages Posted: 18 Oct 2002

See all articles by Takatoshi Tabuchi

Takatoshi Tabuchi

University of Tokyo - Faculty of Economics

Jacques-François Thisse

Catholic University of Louvain (UCL); Centre for Economic Policy Research (CEPR)

Date Written: September 2002

Abstract

We consider an economic geography model in which all firms and workers are mobile, but the agglomeration of firms and workers within a region generates urban costs. We show that industries with high transport costs tend to be more agglomerated than industries with low transport costs. This is to be contrasted to the result obtained in the one-industry case in which agglomeration arises for low transport costs. We also show that firms supplying non-tradable consumer services are more agglomerated than firms belonging to light industries. In this case, the equilibrium involves an urban hierarchy: for each good, a larger array of varieties is produced within the same city.

Keywords: Interregional mobility, intersectoral mobility, agglomeration, transport costs, urban costs

JEL Classification: F12, F16, J60, L13, R12

Suggested Citation

Tabuchi, Takatoshi and Thisse, Jacques-François, Regional Specialization and Transport Costs (September 2002). CEPR Discussion Paper No. 3542. Available at SSRN: https://ssrn.com/abstract=342267

Takatoshi Tabuchi (Contact Author)

University of Tokyo - Faculty of Economics ( email )

7-3-1 Hongo, Bunkyo-ku
Tokyo 113-0033
Japan
+81 3 5841 5603 (Phone)
+81 3 5841 5521 (Fax)

Jacques-François Thisse

Catholic University of Louvain (UCL) ( email )

Place des Doyens 1
Louvain-la-Neuve, 1348
Belgium

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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