This paper presents a model of strategic locational choice by duopolistic firms in an urban area where consumer locations are endogenous and where a public facility is exogenously fixed. A welfare analysis taking their strategic behaviour into account is conducted. It is shown that the firms'...

We explore the role of human capital investments in the location decisions of firms. We show that whether human capital investments act as a force for or against concentration depends on who is undertaking them and whether they are industry- or firm-specific. We also discuss the empirical...

We provide empirical evidence on the role of labour market pooling in determining the spatial concentration of UK manufacturing establishments. This role arises because large concentrations of employment iron out idiosyncratic shocks and improve establishments' ability to adapt their employment...

Why are some cities specialized and others diversified? What are the advantages and disadvantages of urban specialization and diversity? To what extent does the structure of cities, and the activities of firms and people in them, change over time? How does the sectoral composition of cities...

Using a matched employer-employee dataset on Italy we look at the spatial distribution of wages among provinces. We find evidence of both urbanization and market potential externalities, with the second one being more relevant. However, spatial sorting of skills is at work and explains a great...

This Paper first develops a tractable economic geography model we use to investigate the decline of transport costs as a cause of regional inequalities. Next, we perform a structural estimation of this model using a new dataset on road transport costs between the 341 French Employment Areas. We...

Why are some cities specialized and others diversified? What are the advantages and disadvantages of urban specialization and diversity? To what extent does the structure of cities, and the activities of firms and people in them, change over time? How does the sectoral composition of cities...

We document and then develop a model explaining and relating changes in firms’ organization and in urban structure. Sharing of business services by headquarters and of sector-specific intermediates by production plants within a city reduces costs, while congestion increases with city size. A...

Cities are often viewed as places fostering employment. It is shown that the choice of a particular location within a city is a key factor for the creation of jobs by a new firm. This question is addressed in the context of a standard urban model in which existing firms are established at the...

We develop a criterion to distinguish two dominant paradigms of international trade theory: constant-returns perfectly competitive models, and increasing-returns monopolistically competitive models. Our analysis makes use of the pervasive presence of home-biased expenditure. It predicts that...