Chapter 59

The Empirics of Agglomeration and Trade

Keith Head     Faculty of Commerce, University of British Columbia, 2053 Main Mall, Vancouver, BC, Canada V6T1Z2.

Thierry Mayer     aUniversité de Paris I Panthéon Sorbonne (TEAM), Paris, France.

JEL classification: F12, R12


This chapter examines empirical strategies that have been or could be used to evaluate the importance of agglomeration and trade models. This theoretical approach, widely known as “New Economic Geography” (NEG), emphasizes the interaction between transport costs and firm-level scale economies as a source of agglomeration. NEG focuses on forward and backward trade linkages as causes of observed spatial concentration of ...

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