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Agglomeration and market interaction

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  • FUJITA, Masahisa
  • THISSE, Jacques-François

Abstract

The most salient feature of the spatial economy is the presence of a large variety of economic agglomerations. Our purpose is to review some of the main explanations of this universal phenomenon, as they are proposed in urban economics and modern economic geography. We first show why the competitive framework can hardly be the foundation for the economics of agglomeration. We then briefly review the alternative modeling strategies. In the hope to make our paper accessible to a broad audience, we presents in detail the two models that have been used so farto study the spatial distribution of economic activities. Finally, several extensions of these models are discussed.
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Suggested Citation

  • FUJITA, Masahisa & THISSE, Jacques-François, 2003. "Agglomeration and market interaction," LIDAM Reprints CORE 1607, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:1607
    DOI: 10.1006/jjie.1996.0021
    Note: In : M. Dewatripont, L.P. Hansen and S. Turnovsky (eds.), Advances in Economics and Econometrics. Theory and Applications, Eighth World Congress, Volume 1. Cambridge, Cambridge University Press, 302-338, 2003.
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    Cited by:

    1. Kristian Behrens, 2003. "International trade and internal geography revisited," Working Papers hal-01526511, HAL.
    2. Richard Baldwin & James Harrigan, 2011. "Zeros, Quality, and Space: Trade Theory and Trade Evidence," American Economic Journal: Microeconomics, American Economic Association, vol. 3(2), pages 60-88, May.
    3. Alfonso Irarrazabal & Andreas Moxnes & Luca David Opromolla, 2015. "The Tip of the Iceberg: A Quantitative Framework for Estimating Trade Costs," The Review of Economics and Statistics, MIT Press, vol. 97(4), pages 777-792, October.
    4. Anna Bottasso & Maurizio Conti & Simone Robbiano & Marta Santagata, 2022. "Roads to innovation: Evidence from Italy," Journal of Regional Science, Wiley Blackwell, vol. 62(4), pages 981-1005, September.
    5. Riukula, Krista & Väänänen, Touko, 2024. "Estimating the Labour Market Impacts of Transport Projects in Finland," ETLA Working Papers 120, The Research Institute of the Finnish Economy.
    6. Su, Yaqin & Hua, Yue & Deng, Lanfang, 2021. "Agglomeration of human capital: Evidence from city choice of online job seekers in China," Regional Science and Urban Economics, Elsevier, vol. 91(C).
    7. Peter Mayerhofer, 2007. "De-Industrialisierung in Wien(?) Zur abnehmenden Bedeutung der Sachgütererzeugung für das Wiener Beschäftigungssystem: Umfang, Gründe, Wirkungsmechanismen," WIFO Studies, WIFO, number 33120.
    8. Eric J. Heikkila & Ying Xu, 2022. "Polycentric Urbanization and Sustainable Development in China," Global Policy, London School of Economics and Political Science, vol. 13(S1), pages 69-78, April.
    9. Timo Autio & Jorge Padilla & Salvatore Piccolo & Pekka Sääskilahti & Lotta Väänänen, 2020. "On the Risk of Using a Firm-Level Approach to Identify Relevant Markets," CSEF Working Papers 581, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    10. Robbiano, Simone, 2021. "The innovative impact of public research institutes: evidence from Italy," MPRA Paper 106386, University Library of Munich, Germany.
    11. Douglas Silveira & Izak Silva & Silvinha Vasconcelos & Fernando Perobelli, 2020. "The Brexit game: uncertainty and location decision," Papers in Regional Science, Wiley Blackwell, vol. 99(6), pages 1515-1538, December.
    12. Liu, Xielin & Ji, Xiaohui & Ge, Shuang, 2024. "Does the complexity and embeddedness of knowledge recombination contribute to economic development? —— Observations from prefecture cities in China," Research Policy, Elsevier, vol. 53(2).

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