DP13381 | Trade Liberalization and the Agglomeration of Heterogeneous Entrepreneurs

Publication Date

12/10/2018

JEL Code(s)

  • F12, F15, R12

Keyword(s)

  • agglomeration, Heterogeneous Firms, trade liberalization

Programme Area(s)

  • International Trade and Regional Economics

Abstract

This paper introduces spatial sorting of heterogeneous entrepreneurs (firms) in the 'footloose entrepreneur' trade and geography model. The model generates agglomeration from a uniform space contrary to the 'footloose capital' model. The model also generates spatial sorting in reverse productivity order with the least productive entrepreneur being the first to relocate.