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Is remoteness a locational disadvantage ?

Author

Listed:
  • Kristian Behrens

    (CORE - UCL - Université Catholique de Louvain = Catholic University of Louvain)

  • Carl Gaigné

    (Économie et Sociologie Rurales - INRA - Institut National de la Recherche Agronomique)

  • Gianmarco I.P. Ottaviano

    (UNIBO - Alma Mater Studiorum Università di Bologna = University of Bologna)

  • Jacques-François Thisse

    (CORE - UCL - Université Catholique de Louvain = Catholic University of Louvain)

Abstract

We study the impacts of changes in international trade and domestic transport costs on the internal geography of countries in the presence of geographical asymmetries. To do so, we develop a two-country four-region model in which one country has a region that exhibits a ‘geographical advantage' in terms of better access to the other country's markets. Our analysis reveals that, in equilibrium, the space-economies of the trading partners are interdependent and that agglomeration in one country reduces the occurrence of agglomeration in the other, thus showing that physical geography suffices to build strong connections between the two space-economies. We also show that remoteness need not be a geographical disadvantage since a landlocked region may well be the location that attracts the larger share of firms. This is so when internal transport costs are high and, therefore, act as a barrier to competition from abroad.

Suggested Citation

  • Kristian Behrens & Carl Gaigné & Gianmarco I.P. Ottaviano & Jacques-François Thisse, 2006. "Is remoteness a locational disadvantage ?," Post-Print hal-02416854, HAL.
    • Handle: RePEc:hal:journl:hal-02416854
    DOI: 10.1093/jeg/lbi024
    as

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