This paper examines the causes of spatial inequalities in economic development across rural America. A theoretical model is developed to analyze interactions between location decisions of firms and households as they are affected by natural endowments, accumulated human and physical capital, and...

The emerging literature on firm heterogeneity suggests that trade liberalization raises industry average productivity by forcing its least productive firms to exit. Consequently, resources and market shares are reallocated toward the industry¡¯s more productive firms. We extend...