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Please use this identifier to cite or link to this item: http://hdl.handle.net/10400.5/2353

Title: Location of Upstream and Downstream Industries
Authors: Pontes, José Pedro
Keywords: Oligopoly
Vertically-Linked Firms
Location
Spatial Fragmentation
Issue Date: 2008
Publisher: ISEG – Departamento de Economia
Citation: Pontes, José Pedro. 2008. "Location of Upstream and Downstream Industries". Instituto Superior de Economia e Gestão - DE Working papers nº 30-2008/DE/UECE
Series/Report no.: DE Working papers;nº 30-2008/DE/UECE
Abstract: This paper studies the issue of agglomeration versus fragmentation of vertically related industries. While the downstream industry works under perfect competition, the upstream industry is a duopoly where each firm supplies a differentiated input to the competitive firms. These process the inputs under a quadratic production function entailing decreasing returns as in PENG, THISSE and WANG (2006). It is found that fragmentation occurs if the transport cost of final goods is medium to high, while the transport cost of inputs is low. Otherwise, agglomeration prevails. Multiple agglomerated equilibria are possible if the transport cost of intermediate goods is either medium or high.
URI: http://hdl.handle.net/10400.5/2353
ISSN: 0874-4548
Appears in Collections:UECE - Documentos de Trabalho / UECE - Working Papers
DE - Documentos de trabalho / Working Papers

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