Amiti, Mary; Pissarides, Christopher - C.E.P.R. Discussion Papers - 2002
the quality of the match between job and worker, trade liberalization may lead to industrial agglomeration and inter …-industry trade. The agglomeration force is the improvement in the quality of matches when firms recruit from a bigger pool of labour …. The forces against agglomeration are the existence of trade costs and monopoly power in the labour market. We show that …