STAGES OF REGIONAL DEVELOPMENT AND SPATIAL CONCENTRATION

We develop an economic geography model which examines the spatial concentration of different kinds of activities during four stages of regional development. First, the localization of a "standardized" industry can be based on the exploitation of external and pecuniary scale economies within a monopolistic competitive environment (this is similar to the industry Krugman (1991a, b) refers to in his model). Secondly, an autonomous technological progress will influence the location of a technological industry, operating in a competitive environment; this technological progress will spread to other regions due to technological externalities. During the next stage of regional development, the industrial activity will lead to the development of an intermediate sector for services to production that might be a "metropolization" force.