DP13381 Trade Liberalization and the Agglomeration of Heterogeneous Entrepreneurs
Author(s): | Rikard Forslid, Toshihiro Okubo |
Publication Date: | December 2018 |
Date Revised: | December 2018 |
Keyword(s): | agglomeration, Heterogeneous Firms, trade liberalization |
JEL(s): | F12, F15, R12 |
Programme Areas: | International Trade and Regional Economics |
Link to this Page: | cepr.org/active/publications/discussion_papers/dp.php?dpno=13381 |
This paper introduces spatial sorting of heterogeneous entrepreneurs (firms) in the 'footloose entrepreneur' trade and geography model. The model generates agglomeration from a uniform space contrary to the 'footloose capital' model. The model also generates spatial sorting in reverse productivity order with the least productive entrepreneur being the first to relocate.