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Spatial organization in international economics

by Berezin, Peter

Abstract (Summary)
Spatial Organization in International Economics Ph.D. Thesis (2000) by Peter Berezin Department of Economics University of Toronto This thesis consists of three essays that study key aspects of the spatial organization of economic activity. The first essay develops a theoretical framework that helps explain i) the considerable productivity dispersion arnong plants, ii) why exporters are more productive than non-exporters iii) why exporters tend to be larger than non-exporters, iv) why the fiaction of plants that export is small, v) why even among those plants that do export, the fraction of revenues eamedfiom cxporting tends to be srnall and vi) why older plants tend to grow output at a slower rate than younger fii-ms. It is also revealed that country size, as measured by the number of markets in a country, can have a signifiant effect on how quickly firms grow. The essay develops a novel way to solve dynarnic optimization problems when "state-space" constraints are present. The solution strategy is applicable to a wide variety of problems in which agents are not constrained now but expect to be constrained in the future. The second essay develops a general equilibriurn model in which oligopolistic cornpetition ieads to agglomeration. When trade costs fa11 sufficiently far, one region will become highly industrialized (the core) while the other region will become deindustrialid (the periphery). Higher demand for services and mandacturing workers will increase wages in the core but depress wages in the periphery. As a result, gIobal inequality is seen to be an inevitable consecpence of globalization and international trade. The third tssay develops a model in which an increase in the volatility of firm-specific productivity shocks increases national incorne. Labour market pooling ensures that workers are always moving hm less productive finns to more productive fims, thus raising the average productivity of the workforce. It is for this reason that finns tend to locate close to other firms, especially when they employ the same type of labour. It is shown that countries whose firmsexperience temporarily large firm-specific productivity shocks will runcurrent account surpIuses. The labour market pooling mode1 is examined with data onjob turnover. It is show that the top 5 percent of most concentrated industries tend to have rates of labour turnover which are nearly twice the national average.
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Source Type:Master's Thesis

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Date of Publication:01/01/2000

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