Agglomeration economies reflect proximity and are an important explanation for industrial location. They feature prominently in the theories of location, including intermediate inputs and labour of the new economic geography and knowledge spillovers in the new growth theory. However, while there...

The European integration process is constantly deepening. In the 90s of the last century the project of the internal market was completed and then Member States started to implement the provisions of a monetary union. Coordination proceeds also in terms of fiscal, structural and to some extent...

A Melitz-style model of monopolistic competition with heterogeneous firms is integrated into a simple New Economic Geography model to show that the standard assumption of identical firms is neither necessary nor innocuous. We show that re-locating to the big region is most attractive for the...

In this chapter we have briefly reviewed the recent theoretical advances made regarding the location of production, with emphasis on agglomeration of production across countries. We have confronted the theoretical explanations with the quite scarce empirical evidence on agglomeration in foreign...