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Does Techological Progress Affect the Location of Economic Activity?

Author

Listed:
  • Tabuchi, T.

    (University of Tokyo)

  • Thisse, J.-F.

    (Université catholique de Louvain, CORE, Belgium)

  • Zhu, X.

    (Zhejiang University)

Abstract

We show that how technological innovations and migration costs interact to shape the space-economy. Regardless of the level of transport costs, rising labor productivity fosters the agglomeration of activities, whereas falling transport costs do not affect the location of activities. When labor is heterogeneous, the number of workers residing in the more productive region increases by decreasing order of productive efficiency when labor productivity rises. This process affects in opposite directions the welfare of those who have a lower productivity.

Suggested Citation

  • Tabuchi, T. & Thisse, J.-F. & Zhu, X., 2015. "Does Techological Progress Affect the Location of Economic Activity?," LIDAM Discussion Papers CORE 2015011, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2015011
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    References listed on IDEAS

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    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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