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Producer Services, Economic Geography, and Services Tradability
Author(s) -
De Vaal Albert,
Van Den Berg Marianne
Publication year - 1999
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/0022-4146.00148
Subject(s) - goods and services , consumption (sociology) , variety (cybernetics) , service (business) , production (economics) , mode (computer interface) , business , trade in services , economics , economic geography , outcome (game theory) , industrial organization , agricultural economics , international trade , microeconomics , economy , trade barrier , computer science , artificial intelligence , sociology , operating system , social science
We investigate how the incorporation of producer services linkages affects the outcome of an economic geography model. We specify the production of manufactures such that a variety of producer services is needed to transform tradable unfinished goods into final consumption goods. We find that service linkages promote the concentration of economic activity in a single region, but whether full concentration is achieved depends on the costs and mode of services trade. Applying the model to a multiregion world shows that incorporating producer services may also give rise to regions that specialize in different economic activities.