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The division of labor need not imply regional specialization

Leppälä, Samuli and Desrochers, P. 2010. The division of labor need not imply regional specialization. Journal of Economic Behavior & Organization 74 (1-2) , pp. 137-147.

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The regional specialization of economic activities is generally deemed desirable for three reasons: (1) the law of comparative advantage; (2) localized economies of scale; and (3) knowledge spillovers. Taking a methodological individualist perspective, we claim that: (1) the law of comparative advantage, while valid for individuals and firms, does not necessarily imply regional specialization when regions are viewed as consisting of heterogeneous individuals; (2) localized economies of scale are seldom specific to one industry and external in all but the regional level; and (3) the study of knowledge spillovers is inconclusive and would benefit from a more disaggregated perspective.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
Uncontrolled Keywords: Regional specialization; Comparative advantage; Economies of scale and scope; Knowledge spillovers
Publisher: Elsevier
ISSN: 0167-2681
Last Modified: 04 Jun 2017 04:31

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