Abstract
This paper examines the importance of factor mobility within countries for the manifestation of agglomeration and location effects emphasized in the new economic geography literature. Working with a model of trade under monopolistic competition, the relationship of factor mobility (in particular labor) to industry adjustment and relocation is developed analytically, and then illustrated with a computational example. The computational exercise involves a notional reduction in trading costs within the European Union.
Thanks are due to Richard Baldwin, James Markusen and Douglas Nelson for helpful comments.
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Francois, J. (2001). Factor Mobility, Economic Integration, and the Location of Industry. In: Baldwin, R.E., Brunetti, A. (eds) Economic Impact of EU Membership on Entrants. Springer, Boston, MA. https://doi.org/10.1007/978-1-4757-3407-2_4
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DOI: https://doi.org/10.1007/978-1-4757-3407-2_4
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