IDEAS home Printed from https://ideas.repec.org/a/bla/manchs/v92y2024i6p636-662.html
   My bibliography  Save this article

Premature agglomeration?: Two phases of development with spatial sorting

Author

Listed:
  • Rikard Forslid
  • Toshihiro Okubo

Abstract

Clusters in the developing world do, to a large extent, attract low‐educated individuals, and these clusters are in some cases, characterized by urbanization without industrialization. This contrasts starkly to clusters in advanced economies that attract high‐skilled individuals and entrepreneurs. In this paper, we develop a model of agglomeration and spatial sorting that is consistent with these two types of different agglomeration processes in developed and developing countries. We show that a poor country that has an agglomeration with low skilled individuals, may get stuck in this equilibrium, but that free mobility of human capital from the outset nevertheless is superior from the perspective of total social welfare.

Suggested Citation

  • Rikard Forslid & Toshihiro Okubo, 2024. "Premature agglomeration?: Two phases of development with spatial sorting," Manchester School, University of Manchester, vol. 92(6), pages 636-662, December.
    • Handle: RePEc:bla:manchs:v:92:y:2024:i:6:p:636-662
    DOI: 10.1111/manc.12484
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/manc.12484
    Download Restriction: no
    File URL: https://libkey.io/10.1111/manc.12484?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Richard Baldwin & Rikard Forslid & Philippe Martin & Gianmarco Ottaviano & Frederic Robert-Nicoud, 2005. "Economic Geography and Public Policy," Economics Books, Princeton University Press, edition 1, number 7524.
    2. Kristian Behrens & Gilles Duranton & Frédéric Robert-Nicoud, 2014. "Productive Cities: Sorting, Selection, and Agglomeration," Journal of Political Economy, University of Chicago Press, vol. 122(3), pages 507-553.
    3. Volker Nocke, 2006. "A Gap for Me: Entrepreneurs and Entry," Journal of the European Economic Association, MIT Press, vol. 4(5), pages 929-956, September.
    4. Bosker, Maarten & Brakman, Steven & Garretsen, Harry & Schramm, Marc, 2012. "Relaxing Hukou: Increased labor mobility and China’s economic geography," Journal of Urban Economics, Elsevier, vol. 72(2), pages 252-266.
    5. Borck, Rainald & Pfluger, Michael, 2006. "Agglomeration and tax competition," European Economic Review, Elsevier, vol. 50(3), pages 647-668, April.
    6. Diego Puga, 2010. "The Magnitude And Causes Of Agglomeration Economies," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 203-219, February.
    7. Gharad Bryan & Edward Glaeser & Nick Tsivanidis, 2020. "Cities in the Developing World," Annual Review of Economics, Annual Reviews, vol. 12(1), pages 273-297, August.
    8. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    9. Pfluger, Michael, 2004. "A simple, analytically solvable, Chamberlinian agglomeration model," Regional Science and Urban Economics, Elsevier, vol. 34(5), pages 565-573, September.
    10. Gianmarco Ottaviano & Takatoshi Tabuchi & Jacques-François Thisse, 2021. "Agglomeration And Trade Revisited," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 3, pages 59-85, World Scientific Publishing Co. Pte. Ltd..
    11. Klaus Desmet & Ejaz Ghani & Stephen O'Connell & Esteban Rossi-Hansberg, 2015. "The Spatial Development Of India," Journal of Regional Science, Wiley Blackwell, vol. 55(1), pages 10-30, January.
    12. Richard E. Baldwin & Toshihiro Okubo, 2006. "Heterogeneous firms, agglomeration and economic geography: spatial selection and sorting," Journal of Economic Geography, Oxford University Press, vol. 6(3), pages 323-346, June.
    13. Rikard Forslid & Toshihiro Okubo, 2015. "Which Firms Are Left In The Periphery? Spatial Sorting Of Heterogeneous Firms With Scale Economies In Transportation," Journal of Regional Science, Wiley Blackwell, vol. 55(1), pages 51-65, January.
    14. Douglas Gollin & Remi Jedwab & Dietrich Vollrath, 2016. "Urbanization with and without industrialization," Journal of Economic Growth, Springer, vol. 21(1), pages 35-70, March.
    15. Takatoshi Tabuchi & Jacques†François Thisse & Xiwei Zhu, 2018. "Does Technological Progress Magnify Regional Disparities?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(2), pages 647-663, May.
    16. Edward L. Glaeser, 2014. "A World Of Cities: The Causes And Consequences Of Urbanization In Poorer Countries," Journal of the European Economic Association, European Economic Association, vol. 12(5), pages 1154-1199, October.
    17. Whalley, John & Zhang, Shunming, 2007. "A numerical simulation analysis of (Hukou) labour mobility restrictions in China," Journal of Development Economics, Elsevier, vol. 83(2), pages 392-410, July.
    18. Forslid, Rikard, 1999. "Agglomeration with Human and Physical Capital: an Analytically Solvable Case," CEPR Discussion Papers 2102, C.E.P.R. Discussion Papers.
    19. Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 49, pages 2119-2171, Elsevier.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Forslid, Rikard & Okubo, Toshihiro, 2017. "Early agglomeration or late agglomeration?: Two phases of development with spatial sorting," CEPR Discussion Papers 11977, C.E.P.R. Discussion Papers.
    2. Rikard Forslid & Toshihiro Okubo, 2021. "Agglomeration of low-productive entrepreneurs to large regions: a simple model," Spatial Economic Analysis, Taylor & Francis Journals, vol. 16(4), pages 471-486, October.
    3. Breinlich, Holger & Ottaviano, Gianmarco I.P. & Temple, Jonathan R.W., 2014. "Regional Growth and Regional Decline," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 4, pages 683-779, Elsevier.
    4. Stef Proost & Jacques-François Thisse, 2019. "What Can Be Learned from Spatial Economics?," Journal of Economic Literature, American Economic Association, vol. 57(3), pages 575-643, September.
    5. repec:esx:essedp:729 is not listed on IDEAS
    6. Carl Gaigné & Jacques-François Thisse, 2013. "New Economic Geography and the City," Working Papers SMART 13-02, INRAE UMR SMART.
    7. Pierre‐Philippe Combes & Gilles Duranton & Laurent Gobillon & Diego Puga & Sébastien Roux, 2012. "The Productivity Advantages of Large Cities: Distinguishing Agglomeration From Firm Selection," Econometrica, Econometric Society, vol. 80(6), pages 2543-2594, November.
    8. Ottaviano, Gianmarco I.P., 2012. "Agglomeration, trade and selection," Regional Science and Urban Economics, Elsevier, vol. 42(6), pages 987-997.
    9. José M. Gaspar, 2018. "A prospective review on New Economic Geography," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 61(2), pages 237-272, September.
    10. Antonio Accetturo & Valter Di Giacinto & Giacinto Micucci & Marcello Pagnini, 2018. "Geography, productivity, and trade: Does selection explain why some locations are more productive than others?," Journal of Regional Science, Wiley Blackwell, vol. 58(5), pages 949-979, November.
    11. Matthias Wrede, 2013. "Heterogeneous skills and homogeneous land: segmentation and agglomeration," Journal of Economic Geography, Oxford University Press, vol. 13(5), pages 767-798, September.
    12. Behrens, Kristian & Robert-Nicoud, Frédéric, 2015. "Agglomeration Theory with Heterogeneous Agents," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 171-245, Elsevier.
    13. Forslid, Rikard & Okubo, Toshihiro, 2014. "Spatial sorting with heterogeneous firms and heterogeneous sectors," Regional Science and Urban Economics, Elsevier, vol. 46(C), pages 42-56.
    14. Hisamitsu Saito, 2015. "Firm Heterogeneity, Multiplant Choice, And Agglomeration," Journal of Regional Science, Wiley Blackwell, vol. 55(4), pages 540-559, September.
    15. Takashi Akamatsu & Tomoya Mori & Yuki Takayama, 2015. "Agglomerations in a multi-region economy: Poly-centric versus mono-centric patterns," KIER Working Papers 929, Kyoto University, Institute of Economic Research.
    16. Xu, Xilei & Dong, Xuebing & Chi, Ruonan & Li, Jixia, 2022. "How does heterogeneous spillover of knowledge affect economic geography? ——An extended local spillover model," Socio-Economic Planning Sciences, Elsevier, vol. 83(C).
    17. von Ehrlich, Maximilian & Seidel, Tobias, 2015. "Regional implications of financial market development: Industry location and income inequality," European Economic Review, Elsevier, vol. 73(C), pages 85-102.
    18. Hisamitsu Saito & Munisamy Gopinath & JunJie Wu, 2011. "Heterogeneous firms, trade liberalization and agglomeration," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 44(2), pages 541-560, May.
    19. OKUBO Toshihiro & Rikard FORSLID, 2010. "Spatial Relocation with Heterogeneous Firms and Heterogeneous Sectors," Discussion papers 10056, Research Institute of Economy, Trade and Industry (RIETI).
    20. Kristian Behrens & Frédéric Robert‐Nicoud, 2009. "Krugman's Papers in Regional Science: The 100 dollar bill on the sidewalk is gone and the 2008 Nobel Prize well‐deserved," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 467-489, June.
    21. Kiminori Matsuyama & Philip Ushchev, 2022. "Selection and Sorting of Heterogeneous Firms through Competitive Pressures," CIRJE F-Series CIRJE-F-1189, CIRJE, Faculty of Economics, University of Tokyo.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:manchs:v:92:y:2024:i:6:p:636-662. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/semanuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.