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The economic geography of trade, production, and income: a survey of empirics

Overman, Henry G., Redding, Stephen and Venables, Anthony J. (2001) The economic geography of trade, production, and income: a survey of empirics. 508. Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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Abstract

This paper surveys the empirical literature on the economic geography of trade flows, factor prices, and the location of production. The discussion is structured around the empirical predictions of a canonical theoretical model. We review empirical evidence on the determinants of trade costs and the effects of these costs on trade flows. Geography is a major determinant of factor prices, and access to foreign markets alone is shown to explain some 35% of the cross-country variation in per capita income. The paper documents empirical findings of home market (or magnification) effects, suggesting that imperfectly competitive industries are drawn more than proportionately to locations with good market access. Sub-national evidence establishes the presence of industrial clustering, and we examine the roles played by product market linkages to customer and supplier firms, knowledge spillovers, and labour market externalities. This paper was produced as part of the Centre’s Globalisation Programme

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/
Additional Information: © 2001 H. G. Overman, S. Redding and A. J. Venables
Library of Congress subject classification: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Departments > Economics
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 508
Date Deposited: 05 Mar 2008 10:08
URL: http://eprints.lse.ac.uk/3712/

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