Trade costs, market access, and economic geography

2011 ◽  
pp. 193-223 ◽  
Author(s):  
E. M. Bosker ◽  
H. Garretsen
Keyword(s):  
Economic Geography ◽  
Market Access ◽  
Trade Costs

The Contribution of New Economic Geography

2020 ◽  
Author(s):  
Pascal Mossay ◽  
Pierre M. Picard
Keyword(s):  
Economic Geography ◽  
Urban Areas ◽  
Multiple Equilibria ◽  
Market Access ◽  
Experimental Methodology ◽  
Empirical Literature ◽  
New Economic Geography ◽  
Spatial Concentration ◽  
Transport Costs ◽  
Economic Activities

New Economic Geography (NEG) provides microeconomic foundations for explaining the spatial concentration of economic activities across regions, cities, and urban areas. The origins of the NEG literature trace back to trade, location, and urbans economics theories. In NEG, agglomeration and dispersion forces explain the existence of spatial agglomerations. A NEG model usually incorporates a combination of such forces. In particular, firm proximity to large markets and the importance of linkages along a supply chain are typical agglomeration forces. Equilibria properties derived from NEG models are very specific to NEG as they involve multiple equilibria and have a very high dependence on changes in parameters. This phenomenon has important implications for the emergence of nations, regions, and cities. In particular, high transport costs imply the dispersion of economic activities, while low transport costs lead to their spatial concentration. The same forces that shape inequalities and disparities between regions also shape the internal structure of cities. Firms concentrate in urban centers to gain greater access to larger demand. The empirical literature has developed several approaches that shed light on spatial agglomeration and estimate the role and impact of transport costs on market access. A key empirical research question is whether observed patterns could be explained by location amenities or agglomeration forces as put forward by NEG. Quasi-experimental methodology is frequently used for such a purpose. NEG theory is supported by empirical evidence, demonstrating the role of market access.

The persistence of apartheid regional wage disparities in South Africa

2021 ◽  
Author(s):  
Gibson Mudiriza ◽  
Lawrence Edwards
Keyword(s):  
South Africa ◽  
Economic Geography ◽  
Market Access ◽  
Wage Equation ◽  
New Economic Geography ◽  
South Africans ◽  
Economic Forces ◽  
Black South Africans ◽  
Neg Model ◽  
Wage Disparities

Abstract In this article, we use a new economic geography (NEG) model to estimate the extent to which the persistence in apartheid regional wage disparities in South Africa is an outcome of economic forces such as market access. We estimate a structural wage equation derived directly from the NEG theory for 354 regions over the period 1996 to 2011. We find support for an augmented NEG model in explaining regional wage disparities across regions in South Africa, although the market access effects are highly localised in view of high distance coefficients. We also find, even after controlling for NEG and other region-specific characteristics, a persistent wage deficit in the former homelands, where under apartheid black South Africans were forcefully relocated according to their ethnic groups. Average wages of workers in homelands remained approximately 17% lower than predicted between 1996 and 2011, despite the reintegration of these regions into South Africa and the implementation of regional policies after the end of apartheid.

scholarly journals Market Access, Trade Costs, and Technology Adoption: Evidence from Northern Tanzania

2018 ◽  
Author(s):  
Shilpa Aggarwal ◽  
Brian Giera ◽  
Dahyeon Jeong ◽  
Jonathan Robinson ◽  
Alan Spearot
Keyword(s):  
Technology Adoption ◽  
Market Access ◽  
Trade Costs ◽  
Northern Tanzania

scholarly journals Location Fundamentals, Agglomeration Economies, and The Geography of Multinational Firms

2019 ◽  
pp. 217-252
Author(s):  
Laura Alfaro ◽  
Maggie Xiaoyang Chen
Keyword(s):  
Multinational Corporations ◽  
Economic Geography ◽  
Multinational Firms ◽  
Urban Economics ◽  
Market Access ◽  
Capital Good ◽  
Agglomeration Economies ◽  
Data Set ◽  
Industry Agglomeration ◽  
Good Market

This chapter examines the patterns and determinants underlying the global economic geography of multinational corporations (MNCs), focusing in particular on location fundamentals and agglomeration economies. The discussion builds on three broad strands of literature: the first, in the area of international trade, explores the role of location fundamentals in MNCs’ decisions to invest abroad; the second, in the field of regional and urban economics, studies the importance of Marshallian agglomeration forces in domestic economic geography; and the third assesses the advantage of proximity between customers and suppliers. A spatially continuous index of pairwise-industry agglomeration is developed using a unique worldwide establishment data set, WorldBase, that shows detailed location, ownership, and operation information for plants in more than 100 countries. The results suggest that location fundamentals, including market access and comparative advantage, and agglomeration economies such as capital-good market externality and technology diffusion, play an important role in MNCs’ economic geography.

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