Monthly Archives: April 2014

ECONOMIC INTEGRATION AND INDUSTRY LOCATION: TRADE, INCREASING RETURNS, AND REGIONAL ECONOMIES 3

Post Image

A second strategy to identify the effects of increasing returns on industry location is to use the spatial covariation in wages, employment, and income to estimate the magnitude of scale economies directly. Ciccone and Hall (1996) find that the correlation between labor productivity and the spatial density of employment across U.S. states is consistent with […]

Read More

ECONOMIC INTEGRATION AND INDUSTRY LOCATION: TRADE, INCREASING RETURNS, AND REGIONAL ECONOMIES 2

To understand the relationship between international trade and industry location, we must first identify the underlying forces that shape the spatial distribution of economic activity. In this section, I briefly review empirical research on the relationship between increasing returns to scale and industry location and then examine the particular question of how trade shapes the […]

Read More

ECONOMIC INTEGRATION AND INDUSTRY LOCATION: TRADE, INCREASING RETURNS, AND REGIONAL ECONOMIES

Could trade policy be responsible for regional employment shifts in Canada, Mexico, and the United States? The sheer size of the U.S. economy makes it unlikely that foreign trade could have a substantial impact on industry location. From Table 1 it is evident that the regional reallocation of employment towards the west and southeast has […]

Read More

ECONOMIC INTEGRATION AND INDUSTRY LOCATION: INDUSTRIALIZATION AND SPATIAL CONCENTRATION 3

The industrialization of Mexico was centered in Mexico City, which until recently was the country’s principal manufacturing center. Table 3 shows the regional distribution of manufacturing employment in Mexico for the period 1930 to 1993. Mexico City’s share of the national manufacturing labor force rose from 19.0% in 1930 to 46.0% in 1960. Over that […]

Read More

ECONOMIC INTEGRATION AND INDUSTRY LOCATION: INDUSTRIALIZATION AND SPATIAL CONCENTRATION 2

Post Image

In Canada, industrial activity has historically also been spatially agglomerated. The country’s manufacturing belt appears to be largely an extension of the U.S. manufacturing belt. Table 2 shows the regional distribution of manufacturing employment in Canada for the period 1926-1995. Ontario, which adjoins the major manufacturing regions of the U.S. northern midwest, has had just […]

Read More

ECONOMIC INTEGRATION AND INDUSTRY LOCATION: INDUSTRIALIZATION AND SPATIAL CONCENTRATION

For most countries, industrialization and urbanization are concurrent events. Industrial development in Canada, Mexico, and the United States brought with it the geographic concentration of economic activity. In each country, industry initially concentrated in a relatively confined geographic area. While industry in North America has moved out of traditional manufacturing regions over the last several […]

Read More

ECONOMIC INTEGRATION AND INDUSTRY LOCATION: INTRODUCTION 2

Post Image

In Fujita (1988) and Krugman (1991), the interaction of increasing returns to scale and transport costs creates a self-reinforcing process of industry agglomeration. Firms desire to concentrate production near large consumer markets since this allows them to economize both on transports costs and fixed production costs. As more firms locate in an industry center, the […]

Read More

ECONOMIC INTEGRATION AND INDUSTRY LOCATION: INTRODUCTION

Post Image

In the United States, the popular press portrayed the debate over the North American Free Trade Agreement (NAFTA) as a conflict of capital versus labor. The logic was that U.S. corporations favored NAFTA, since it would lower their costs of serving the North American market relative to competitors in Japan and Europe, and that labor […]

Read More