Empirically, Trefler (1995) shows that actual trade flows deviate from predictions based on factor abundance theory in a systematic way (which he calls the 'case of the missing trade'). Theoretically, Courant and Deardorff (1992) show that an uneven distribution of factors of production across...

In this paper we have combined concepts from the field of urban economics with views from the area of geographic economics (the New Economic Geography). This approach enabled us to depict both the significance of the characteristics of the city itself and that of its location. Cities which...