Rising trade costs? Agglomeration and trade with endogenous transaction costs

costs. In a model of industry location with endogenous transaction costs that seeks to replicate features from the machinery industry, we show how and under which conditions a decline in transport costs can lead to an increase in the total cost of trade. The subtle relationship between (endogenous) transport costs and the sensitivity of trade to distance is also explored.

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Year of publication:	2008
Authors:	Duranton, Gilles ; Storper, Michael
Published in:	Canadian Journal of Economics. - Canadian Economics Association - CEA. - Vol. 41.2008, 1, p. 292-319
Publisher:	Canadian Economics Association - CEA

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Extent:	application/pdf
Type of publication:	Article
Notes:	Published
Classification:	D23 - Organizational Behavior; Transaction Costs; Property Rights ; R12 - Size and Spatial Distributions of Regional Economic Activity
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005604583