Resource title

Industrial Agglomeration and Economic Development

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Resource description

The paper outlines a static equilibrium model, which analyses the economic development in a two-country case by considering interregional migration in R&D-sectors. The effects of migration and firm decisions on both industrial agglomeration and economic development will be shown: lock-in-effects and free market entry will lead to a concentration of firms. In addition, the consideration of fundamental and secondary research activity leads to a higher number of firms and products by means of cost reduction and spillover effects. The resulting demand of unskilled and skilled labor will be met by sectoral and interregional migration. This reinforces the concentration of economic activity and leads to a higher degree of specialization and economic development. The formation of single equilibria is shown under consideration of exogenous shocks: diminishing transportation cost will turn economies, originally equally endowed and with the same economic structure, to spatial concentration and uneven economic development.

Resource author

Kurt A. Hafner

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/22158

Resource license

Adapt according to the presented license agreement and reference the original author.