Competition and Human Capital Accumulation: A Theory of Interregional Specialization and Trade
Julio J. Rotemberg
We consider a model with several regions whose technological ability and factor
endowments are identical and in which transport costs between regions are nonnegligible.
Nonetheless, certain goods are sometimes produced by multiple firms
all of which are located in the same region. These goods are then exported from
the regions in which their production is agglomerated. Regional agglomeration of
production and trade stem from two forces. First, competition between firms for
the services of trained workers is necessary for the workers to recoup the cost of
acquiring industry-specific human capital. Second, the technology of production
is more efficient when plants are larger than a minimum efficient scale and local
demand is insufficient to support several firms of that scale. We also study the
policy implications of our model.
In order to set up a list of libraries that you have access to,
you must first login
or sign up.
Then set up a personal list of libraries from your profile page by
clicking on your user name at the top right of any screen.