Pflüger, Michael; Südekum, Jens - Institute for the Study of Labor (IZA) - 2004
This paper studies the social desirability of agglomeration and the efficiency arguments for policy intervention in a … stable equilibria with partial agglomeration of firms in addition to core-periphery equilibria for intermediate levels of … trade costs. Our central finding is that the market equilibrium is characterised by over-agglomeration for high trade costs …