Factor Mobility, Economic Integration, and the Location of Industry

  • Joseph Francois


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.


Production Frontier Imperfect Competition Factor Mobility Global Trade Analysis Project Average Cost Price 
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© Springer Science+Business Media New York 2001

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  • Joseph Francois

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