Knowledge Spillovers, Black Holes and the Equilibrium Location of Vertically Linked Industries

Barde, Sylvain (2010) Knowledge Spillovers, Black Holes and the Equilibrium Location of Vertically Linked Industries. Journal of Economic Geography, 10 (1). pp. 27-53. ISSN 1468-2710. (doi:https://doi.org/10.1093/jeg/lbp014) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided)

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Official URL
http://dx.doi.org/10.1093/jeg/lbp014

Abstract

Using a generalized version of the Venables (1996, International Economic Review, 37: 341–359) model, this article explores the relative locations of two vertically linked sectors with knowledge spillovers. Analytical investigation shows that the dynamic properties of the Venables model are significantly affected by the presence of spillovers. In particular, the own-cost reduction effects at low transport costs can be so strong that runaway agglomeration dynamics appear in a manner consistent with the black hole concept found in the literature. However, due to the decay of information over space, these black hole dynamics are endogenous to the model and disappear when transport costs are high enough. Importantly, the location predictions obtained in simulations of the model are consistent with the empirical finding that industrials sector that benefit from spillovers are typically more agglomerated than sector that do not benefit from such spillovers.

Item Type: Article
Additional information: number of additional authors: 0;
Uncontrolled keywords: knowledge spillovers; agglomeration; location of economic activity
Subjects: G Geography. Anthropology. Recreation > G Geography (General)
H Social Sciences > HB Economic Theory
Divisions: Faculties > Social Sciences > School of Economics
Depositing User: Stewart Brownrigg
Date Deposited: 07 Mar 2014 00:05 UTC
Last Modified: 13 Apr 2016 10:20 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/40226 (The current URI for this page, for reference purposes)
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