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Limits to industrial agglomeration

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  • Junius, Karsten

Abstract

This paper presents an economic geography model to show the spatial effects of economic integration. While other authors mainly focused on the explanation of cumulative causation effects that lead to complete concentration or absolutely equal dispersion of industries, this paper explains why limits to industrial agglomeration can be observed in reality. It argues that cumulative causation effects can be counterbalanced by further centrifugal forces such as land rents, adverse self-fulfilling expectations and congestion effects. For large scale agglomerations, congestion effects may be the most relevant force that stop a cumulative trend towards complete concentration caused by scale economies and trade costs.

Suggested Citation

  • Junius, Karsten, 1996. "Limits to industrial agglomeration," Kiel Working Papers 762, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:762
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    Cited by:

    1. Feng, Wei & Sun, Shujun & Yuan, Hang, 2023. "Research on the efficiency of factor allocation in the pilot free trade zones," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 727-745.
    2. Lammers, Konrad & Stiller, Silvia, 2000. "Regionalpolitische Implikationen Der Neuen Okonomischen Geographie," Discussion Paper Series 26137, Hamburg Institute of International Economics.
    3. Stiller, Silvia, 2000. "European Regional Policy In The Light Of The New Economic Geography," ERSA conference papers ersa00p298, European Regional Science Association.
    4. Junius, Karsten, 1996. "Economic development and industrial concentration: An inverted U-curve," Kiel Working Papers 770, Kiel Institute for the World Economy (IfW Kiel).

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    More about this item

    Keywords

    Economic Geography; Agglomeration; Congestion; Location Theory;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • 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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