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Discussion Paper Details

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Title: What Determines the Economic Geography of Europe?

Author(s): Jan I. Haaland, Hans Jarle Kind and Karen-Helene Ulltveit-Moe

Publication Date: February 1999

Keyword(s): Agglomeration, Comparative Advantage, Economic Geography and Industrial Localization

Programme Area(s): International Trade and Regional Economics

Abstract: This paper focuses on what the driving forces behind industry localisation in Europe are. Based on traditional as well as new trade theory and new economic geography our cross-sectoral empirical analysis seeks to explain the pattern of relative and absolute concentration of manufacturing activity. By comparing impact over time, we also consider whether the single market has had an influence on factors determining localisation. The results indicate that the by far most important determinant of economic geography in Europe is localisation of demand. There is also evidence of cumulative causation in the sense that absolute concentration of production and expenditure mutually influence each other.

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Bibliographic Reference

Haaland, J, Kind, H and Ulltveit-Moe, K. 1999. 'What Determines the Economic Geography of Europe?'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2072