Citation

Discussion Paper Details

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Title: The Spread of Industry: Spatial Agglomeration in Economic Development

Author(s): Diego Puga and Anthony Venables

Publication Date: February 1996

Keyword(s): Agglomeration, Industrialization, Linkages and Location

Programme Area(s): International Trade and Regional Economics

Abstract: This paper describes the spread of industry from country to country as a region grows. All industrial sectors are initially agglomerated in one country, tied together by input-output links between firms. Growth expands industry more than other sectors, bidding up wages in the country in which industry is clustered. At some point some firms start to move away, and when a critical mass is reached industry expands in another country, raising wages there. We establish the circumstances in which industry spills over, which sectors move out first, and which are more important in triggering a critical mass.

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Bibliographic Reference

Puga, D and Venables, A. 1996. 'The Spread of Industry: Spatial Agglomeration in Economic Development'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1354