FEEM working papers "Note di lavoro" series
2002 .029

Geographic Concentration and Increasing Returns: a Survey of Evidence

Authors: Paolo Surico
Series: Economy and Society
Editor: Gianmarco I.P. Ottaviano
Type: Journal
Keywords: Increasing returns,market access,demand and cost linkages,large-scale agglomeration
JEL n.: C52,F11,F12,R12
JEL: Economic Surveys
Pages: 17, pp. 693-708


Economic activities are highly clustered. Why is geographic con-centrationbecoming a predominant feature of modern economies? Onthe basis of the empirical models developed by the 'new' theories ofinternational trade, our answer is that increasing returns are the driv-ingforce of economic geography in the US as well as in Europe. Inso doing, we review econometric methods proposed in the literature toseparate and to test alternative theoretical paradigms.

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