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What said the new economic geography about Portugal? An alternative approach

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

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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. We pretend, also, in a linear way to explain the complementarily of clustering models, associated with the New Economic Geography, and polarization associated with the Keynesian tradition. As a summary conclusion, we can say which the agglomeration process shows some signs of concentration in Lisboa e Vale do Tejo and the productivity factor significantly improves the results that explain the regional clustering in Portugal. The aim of this paper is to analyze, yet, the relationship between the regional industry clustering and the demand for labor by companies in Portugal. Again, the results are consistent with the theoretical developments of the New Economic Geography, namely the demand for labor is greater where transport costs are lower and where there is a strong links "backward and forward" and strong economies of agglomeration.

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