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SHARABLE INPUTS, PRODUCT VARIETY, AND CITY SIZES *
Author(s) -
AbdelRahman Hesham M.
Publication year - 1990
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/j.1467-9787.1990.tb00105.x
Subject(s) - variety (cybernetics) , economies of agglomeration , comparative statics , product (mathematics) , industrial organization , production (economics) , business , economic geography , computer science , economics , microeconomics , mathematics , artificial intelligence , geometry
ABSTRACT In this paper, I investigate some of the causes of city formation in spatial economies. A model is proposed in which an intermediate differentiated input shared by more than one industry is the cause of the formation of diversified cities. The desire of both the traded‐good and the local‐good industries to employ a variety of inputs from the intermediate industry provides the reason for the agglomeration of the three industries. In addition, the paper contains a comparative‐statics analysis of the model in an open and a closed‐city framework. It is demonstrated that the larger the city, the more variety of intermediate inputs the city can provide and the more specialized it is in the production of the traded‐good. Moreover, the model suggests that different industrial structures will result in different city Sizes.