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Title: What are Falling Transport Costs doing to Spatial Concentration Across US Counties?

Author(s): Klaus Desmet and Marcel Fafchamps

Publication Date: March 2003

Keyword(s): location, spatial concentration, transport costs and US counties

Programme Area(s): International Trade and Regional Economics

Abstract: Theory is divided on whether falling transport costs lead to more or less spatial concentration of economic activity. Using US county-level data we find that aggregate employment became more concentrated between 1972-92. This aggregate picture hides important differences between sectors though. Whereas non-service sectors have been spreading out, service sectors have become increasingly concentrated by absorbing jobs from nearby areas. This cross-sectional variation lends support to Krugman and Venables (1995), who suggest that falling transport costs initially lead to more concentration, and later on to more dispersion.

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Bibliographic Reference

Desmet, K and Fafchamps, M. 2003. 'What are Falling Transport Costs doing to Spatial Concentration Across US Counties?'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=3853