Industrial configuration in an economy with low transportation costs
- PDF / 637,087 Bytes
- 28 Pages / 439.37 x 666.142 pts Page_size
- 8 Downloads / 163 Views
Industrial configuration in an economy with low transportation costs Hajime Takatsuka · Dao-Zhi Zeng
Received: 22 March 2012 / Accepted: 9 January 2013 © Springer-Verlag Berlin Heidelberg 2013
Abstract We examine how the spatial economy with multiple industries is shaped when interregional trade costs and intraregional commuting costs are low. All industries are characterized by increasing returns to scale and monopolistic competition, and they are differentiated by their trade costs and the degree of intra-industry competition measured by their firm numbers. We find some distinct rules in industrial location. First, at most, one industry disperses, while others agglomerate in a region according to their ratios of relative trade costs to firm numbers. Second, industries with stronger competition constitute a smaller region, while those with higher trade costs compose a larger region. The results are consistent with the classical Weberian location theory and suggest that the degree of intra-industry competition also becomes an essential factor to determine industrial location when transportation costs are small. Finally, the population differential between the regions monotonically decreases in the relative commuting cost. JEL Classification
F12 · R12 · R30
H. Takatsuka (B) Graduate School of Management, Kagawa University, Saiwai-cho 2-1, Takamatsu, Kagawa 760-8523, Japan e-mail: [email protected] D.-Z. Zeng Graduate School of Information Sciences, Tohoku University, Aoba 6-3-09, Aramaki, Aoba-ku, Sendai, Miyagi 980-8579, Japan e-mail: [email protected] D.-Z. Zeng Center for Research of Private Economy, Zhejiang University, Zheda Road 38, Hangzhou, 310027 Zhejiang, China
123
H. Takatsuka, D.-Z. Zeng
1 Introduction Urban costs, such as housing and commuting, significantly affect economic activities. The early literature of New Economic Geography (NEG) (e.g., a seminal paper by Krugman 1991) shows that the increasing return to scale (IRS) industry (manufacturing sector) disperses equally in two symmetric regions when interregional trade costs are high, while it agglomerates in one region when trade costs are low. However, including urban costs in Krugman’s model, the above result is complemented by a redispersion process for low trade costs after the agglomeration process for intermediate trade costs, as shown in Helpman (1998), Tabuchi (1998), Murata and Thisse (2005), Suedekum (2006). The real world is not evenly dispersed. Empirically, Glaeser and Kohlhase (2004, pp. 218–220) show that population is increasingly centralized in a few metropolitan regions in the US, while people are increasingly decentralized within those regions. This becomes possible due to the automobile and other forms of rapid transit. Mills and Hamilton (1994, pp. 21–30) have reported that the development of rapid transit greatly decreased the commuting costs during the last century. A similar phenomenon was observed in Tokyo and Osaka, Japan, where dense and enormous mass transit networks enable cities to serve large m
Data Loading...
