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Contribution Details
| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | Declining costs of communication and transportation: what are the effects on agglomerations? |
| Organization Unit | |
| Authors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | European Economic Review |
| Publisher | Elsevier |
| Geographical Reach | international |
| ISSN | 0014-2921 |
| Volume | 44 |
| Number | 9 |
| Page Range | 915 - 919 |
| Date | 2000 |
| Abstract Text | We consider a two-stage model of locational choice. Firms decide in which of three locations (or countries) to build plants; they then compete in all three markets. Knowledge spillovers reduce marginal costs in agglomerations; through intra-firm spillovers these cost reductions can be exported to other locations. We show that improvements in the exchange of information within firms make agglomeration more likely, because knowledge obtained in the center can be transmitted to other locations more easily. Decreases in transportation costs tend to destabilize agglomerations, since competition for peripheral locations increases, which decreases the value of knowledge obtained in agglomerations. |
| Digital Object Identifier | 10.1016/S0014-2921(99)00016-1 |
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