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| Author: | Ricci, L. A. |
| Title: | Economic geography and comparative advantage: Agglomeration versus specialization |
| Journal: | European Economic Review
1999 : FEB, VOL. 43:2, p. 357-377 |
| Index terms: | SPECIALIZATION COMPARATIVE ADVANTAGE ECONOMIES OF SCALE LOCATION OF INDUSTRY COMPETITION |
| Language: | eng |
| Abstract: | The paper investigates the relationship btw. agglomeration and specialization, and the role of comparative vs. absolute advantage. A two-country three-sector model is developed, encompassing a Ricardian comparative advantage, increasing returns, product differentiation, monopolistic competition, and trade costs. Closed-form solutions are derived for the factor immobility case, while factor mobility is analyzed through comparative statics and simulations. Several interesting results arise. Economic integration may reduce or even reverse the agglomeration pattern. Agglomeration in one country reduces its specialization within the IRS industry. An increase(s) in comparative advantage is not necessarily associated with an increase in specialization. |
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