IDEAS home Printed from https://ideas.repec.org/p/zbw/kondp2/321.html
   My bibliography  Save this paper

Geography and comparative advantage

Author

Listed:
  • Ricci, Luca Antonio

Abstract

This paper investigates the relation between agglomeration of economic activity and the pattern of specialization of countries. We develop a model encompassing a Ricardian comparative advantage, increasing returns to scale, product differentiation, monopolistic competition, trade costs, and factor mobility. Several interesting results arise. An endogenous relative increase in the size of one country makes this country less specialized in the homogeneous constant returns commodity and more specialized in the differentiated increasing returns IRS sectors; within the IRS industry, this country will become less specialized in the differentiated good in which it has a comparative advantage. Agglomeration occurs not only in large markets, but also in locations with a high average efficiency in the increasing return industry. Ceteris paribus, comparative advantage drives specialization, while absolute advantage drives agglomeration.

Suggested Citation

  • Ricci, Luca Antonio, 1996. "Geography and comparative advantage," Discussion Papers, Series II 321, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    • Handle: RePEc:zbw:kondp2:321
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/101515/1/726665266.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 857-880.
    2. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    3. Antonio Ricci, Luca, 1997. "A Ricardian Model of New Trade and Location Theory," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 12, pages 47-61.
    4. Krugman, Paul & Venables, Anthony J., 1996. "Integration, specialization, and adjustment," European Economic Review, Elsevier, vol. 40(3-5), pages 959-967, April.
    5. Martin, Philippe & Rogers, Carol Ann, 1995. "Industrial location and public infrastructure," Journal of International Economics, Elsevier, vol. 39(3-4), pages 335-351, November.
    6. repec:fth:iniesr:430 is not listed on IDEAS
    7. repec:hhs:iuiwop:430 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shin-Chyang Lee, 2016. "Endogenous Sunk-Costs Technology and Home Market Effects," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(3), pages 117-122, March.

    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. Antonio Ricci, Luca, 1999. "Economic geography and comparative advantage:: Agglomeration versus specialization," European Economic Review, Elsevier, vol. 43(2), pages 357-377, February.
    2. G Ottaviano & Diego Puga, 1997. "Agglomeration in a global Economy: A Survey," CEP Discussion Papers dp0356, Centre for Economic Performance, LSE.
    3. Maria Florencia Granato, 2011. "REGIONAL NEW ECONOMIC GEOGRAPHY (refereed paper)," ERSA conference papers ersa10p747, European Regional Science Association.
    4. Picard, Pierre M. & Toulemonde, Eric, 2006. "Firms agglomeration and unions," European Economic Review, Elsevier, vol. 50(3), pages 669-694, April.
    5. Toshihiro Atsumi, 2017. "Agglomeration under money illusion," Economics Bulletin, AccessEcon, vol. 37(4), pages 2962-2969.
    6. Ademir Rocha & Fernando Perobelli, 2020. "Spatial distribution of logistics services in Brazil: A potential market analysis," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(1), pages 185-217, February.
    7. Baldwin, Richard E. & Krugman, Paul, 2004. "Agglomeration, integration and tax harmonisation," European Economic Review, Elsevier, vol. 48(1), pages 1-23, February.
    8. Boiscuvier, Éléonore, 2001. "Innovation, intégration et développement régional," L'Actualité Economique, Société Canadienne de Science Economique, vol. 77(2), pages 255-280, juin.
    9. Sandy Dall’erba, 2005. "Distribution of regional income and regional funds in Europe 1989–1999: An exploratory spatial data analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 39(1), pages 121-148, March.
    10. Helena Marques, 2008. "Trade And Factor Flows In A Diverse Eu: What Lessons For The Eastern Enlargement(S)?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(2), pages 364-408, April.
    11. Epifani, Paolo, 2005. "Heckscher-Ohlin and agglomeration," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 645-657, November.
    12. Ottaviano, Gianmarco & Thisse, Jacques-Francois, 2004. "Agglomeration and economic geography," 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 58, pages 2563-2608, Elsevier.
    13. Antonio Ricci, Luca, 1997. "A Ricardian Model of New Trade and Location Theory," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 12, pages 47-61.
    14. 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.
    15. Stéphane Riou, 2003. "Géographie, croissance et politique de cohésion en Europe," Revue Française d'Économie, Programme National Persée, vol. 17(3), pages 171-220.
    16. Karl, Helmut & Matus Velasco, Ximena Fernanda, 2004. "Lessons for regional policy from the new economic geography and the endogenous growth theory," Studies in Spatial Development: Chapters, in: Employment and regional development policy: Market efficiency versus policy intervention, pages 71-89, ARL – Akademie für Raumentwicklung in der Leibniz-Gemeinschaft.
    17. Nicole Madariaga & Sylvie Montout & Patrice Ollivaud, 2004. "Regional convergence, trade liberalization and agglomeration of activities: an analysis of NAFTA and MERCOSUR cases," Cahiers de la Maison des Sciences Economiques bla04069, Université Panthéon-Sorbonne (Paris 1).
    18. 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.
    19. Fabien Candau, 2008. "Entrepreneurs' Location Choice And Public Policies: A Survey Of The New Economic Geography," Journal of Economic Surveys, Wiley Blackwell, vol. 22(5), pages 909-952, December.
    20. Giulio Bottazzi & Giovanni Dosi & Giorgio Fagiolo, 2001. "On the Ubiquitous Nature of the Agglomeration Economies and their Diverse Determinants: Some Notes," LEM Papers Series 2001/10, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.

    More about this item

    Keywords

    Agglomeration; Specialization; Ricardian comparative advantage; Monopolistic competition; Scale economies; Location;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

    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:zbw:kondp2:321. 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/fwkonde.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.