What said the new economic geography about Portugal?

Martinho, Vítor João Pereira Domingues (2011): What said the new economic geography about Portugal? Unpublished.

Abstract

With this work we try to analyse the agglomeration process in Portugal, using the New Economic Geography models, in a linear and in a non linear way. In a non linear way, of referring, as summary conclusion, that with this work the existence of increasing returns to scale and low transport cost, in the Portuguese regions, was proven and, because this, the existence of agglomeration in Portugal. This work aims, also, to study the Portuguese regional agglomeration process, using the linear form of the New Economic Geography models. We pretend, yet, to explain the complementarily of clustering models, associated with the New Economic Geography, and polarization associated with the Keynesian tradition, describing the mechanisms by which these processes are based. As a summary conclusion, we can say which the agglomeration process shows some signs of concentration in Lisboa e Vale do Tejo (which is evidence of regional divergence in Portugal) and the productivity factor significantly improves the results that explain the regional clustering in Portugal (despite being ignored in the models of New Economic Geography). So, we can refer which the new economic geography said that in Portugal there is divergence between the continental regions.

• Item Type: MPRA Paper
• Language: English
• Keywords: new economic geography; linear and non linear models; Portuguese regions
• Subjects: O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O18 - Regional, Urban, and Rural Analyses; C - Mathematical and Quantitative Methods > C2 - Econometric Methods: Single Equation Models; Single Variables > C23 - Models with Panel Data; R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade

References

P. Krugman. Increasing Returns and Economic Geography. Journal of Political Economy, 99, 483-499 (1991).

A. Thomas. Increasing Returns, Congestion Costs and the Geographic Concentration of Firms. Mimeo, International Monetary Fund, 1997.

G. Hanson. Market Potential, Increasing Returns, and Geographic concentration. Working Paper, NBER, Cambridge, 1998.

M. Fujita; P. Krugman and J.A. Venables. The Spatial Economy: Cities, Regions, and International Trade. MIT Press, Cambridge, 2000.

V.J.P.D. Martinho. The importance of increasing returns to scale in the process of agglomeration in Portugal: A non linear empirical analysis. MPRA Paper 32204, University Library of Munich, Germany (2011a).

V.J.P.D. Martinho. Regional agglomeration in Portugal: a linear analysis. MPRA Paper 32337, University Library of Munich, Germany (2011b).

K. Head and T. Mayer. The Empirics of Agglomeration and Trade. CEPR Discussion Paper nº3985, 2003.

A. Marshall. Principles of Economics. Macmillan, London 1920.