This paper investigates the impact of localization economies on firms' locations. It is known that such external effects lead to substantial cost reductions when firms are located together. However, when they are agglomerated, firms also face the prospects of tough price competition whose...

We analyze the geographic concentration of economic activities within the framework of a two country-four region model. Trade between both regions and countries entails transaction costs which are differentiated according to the interregional or international nature of the flows. Allowing for...

This paper considers the racetrack economic approach, where manufacturing activities are distributed continuously. We seek constant-access equilibria and show that smooth equilibrium distributions are always unstable for almost all transport cost functions, whereas agglomeration in 1 or 2 atomic...