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Knowledge spillovers, black holes and the equilibrium location of vertically linked industries

Bibliographic Data

ID12694271
AuthorsSylvain Barde (0000-0003-1465-8236, Fondation Sophia Antipolis, corresponding author)
Year2009
Volume10
Issue1
Pages27-53
Publication date2009-04-17
Open AccessNo
TypeARTICLE
VenueJournal of Economic Geography (JOURNAL)
Journal identifiersISSN: 1468-2702 • E-ISSN: 1468-2710
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1093/jeg/lbp014
OpenAlexW2061958334
LanguageEN
Citations received2
References cited15

Using a generalized version of the Venables (1996, International Economic Review, 37: 341–359) model, this article explores the relative locations of two vertically linked sectors with knowledge spillovers. Analytical investigation shows that the dynamic properties of the Venables model are significantly affected by the presence of spillovers. In particular, the own-cost reduction effects at low transport costs can be so strong that runaway agglomeration dynamics appear in a manner consistent with the black hole concept found in the literature. However, due to the decay of information over space, these black hole dynamics are endogenous to the model and disappear when transport costs are high enough. Importantly, the location predictions obtained in simulations of the model are consistent with the empirical finding that industrials sector that benefit from spillovers are typically more agglomerated than sector that do not benefit from such spillovers

Business · Economic geography · Economics · Industrial organization · International trade · Fiscal Policy and Economic Growth · Global trade and economics · Regional Economics and Spatial Analysis

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Citations per year0.14
Citation span2012 - 2018 (7)
Highly citedNo

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