Urban economists hypothesize that industrial diversity matters for urban growth and development, but metrics for empirically testing this relationship are limited to simple concentration metrics (e.g. location quotient) or summary diversity indices (e.g. Gini, Herfindahl). As shown by recent...

Ellison and Glaeser's (1997) index of geographical concentration distinguishes between natural advantages and spillovers as a source of industrial agglomeration, but the well-known 'observational equivalence' means little is known about the relative importance of these. This paper uses the...

A Melitz-style model of monopolistic competition with heterogeneous firms is integrated into a simple New Economic Geography model to show that the standard assumption of identical firms is neither necessary nor innocuous. We show that re-locating to the big region is most attractive for the...

Pollution-intensive industries are generally characterized by imperfect competition, increasing returns to scale and large transportation costs. We investigate two countries, N and S, each with two sectors. Manufacturing generates cross-border pollution which reduces cross-setoral production in...

A Melitz-style model of monopolistic competition with heterogeneous firms is integrated into a simple New Economic Geography model to show that the standard assumption of identical firms is neither necessary nor innocuous. We show that re-locating to the big region is most attractive for the...