Ron Martin and Peter Sunley
Paul Krugman’s Geographical Economics and Its Implications for Regional Development Theory:
A Critical Assessment (cont'd)
Volume 72, Issue 3
July 1996, pp. 259-292
Trade, Externalities, and Industrial Localization: The Bases of Krugman’s “Geographical Economics”
The New Trade Theory and Location
Increasing Returns and Imperfect Competition
The Role and Implications of Externalities
Krugman’s Geographical Economics and Economic Geography:
A Critical Comparison
The Resurgence of Regional Economies
The New Political Economy of Trade
Krugman’s Model of Economic Integration and Regional
Development: The Lessons of the
Economic Integration and Regional Specialization
Economic Integration and Divergent Regional Growth
Trade and the Regional Policy Issue
Strategic Trade Policy
Geographical Clustering and Strategic Industrial Policy
Aghion, P., and Howitt, P. 1993. A
model of growth through creative destruction. In Technology and the wealth of
nations: The dynamics of constructed advantage, ed. D. Foray and C. Freeman,
Amin, A., and Robins, K. 1990.
Industrial districts and regional development: Limits and possibilities. In
Industrial districts and inter-firm co-operation in
Amin, A., and Thrift, N. 1992. Neo-Marshallian nodes in global networks. International Journal of Urban and Regional Research 16:571-87.
______ eds. 1994. Globalization,
institutions and regional development in
Anderson, K., and Blackhurst, R., eds.
1993. Regional integration and the global trading system.
Audretsch, D., and Feldman, M. 1994.
Knowledge spillovers and the geography of innovation and production.
Discussion Paper 953.
Baldwin, R. 1994. Towards An
Baldwin, R., and Lyons, R. 1990. External economies and European integration: The potential for self-fulfilling expectations.
Discussion Paper 471.
Barro, R. J., and Sala-i-Martin, X. 1991.Convergence across states and regions. Brookings Papers on Economic Activity 1:107-82.
Barth, J.; Kraft, J.; and Wiest, P. 1975. A portfolio-theoretic approach to industrial diversification and regional unemployment. Journal of Regional Science 15 (1):9-15.
Bayoumi, T., and Eichengreen, B. 1993. Shocking aspects of European monetary integration. In Adjustment and growth in the EMU, ed. F. Torres and F. Giavazzi, 193-229. Cambridge: Cambridge University Press.
Bertola, G. 1993. Models of economic
integration and localized growth. In Adjustment and growth in the EMU,
ed. F. Torres and F. Giavazzi, 159-79.
Blanchard, 0. J., and Katz, L. F. 1992. Regional evolutions. Brookings Papers on Eonomic Activity 1:1-59.
Boonstra, W. W. 1991. The EMU and
national autonomy on budget issues. In Finance and the international economy,
Vol. 4., ed. R. O’Brien and S. Hewin, 208-24.
Brander, J., and Spencer, B. 1983. International R and D rivalry and industrial strategy. Review of Economic Studies 50: 707-22.
______ 1985. Export subsidies and international market share rivalry. Journal of lnternational Economics 18:83-100.
Brewer, H. 1984. Regional economic stabilization: An efficient diversification approach. Review of Regional Studies 14 (1):8-21.
Buchanan, J., and Yoon, Y., eds.. 1994.
The return to increasing returns.
Button, K., and Pentecost, E. 1993.
Testing for convergence of the EC regional economies. Economics Research
Paper 93/5. Loughborough: Department of Economics,
Cabellero, R., and Lyons, R. 1990. Internal versus external economies in European manufacturing. European Economic Review 34:805-30.
______ 1991. External effects and
European integration. In The effect of 1992 on trade and industry, ed. L.
A.Winters and A. Venables, 34-53.
Casella, A. 1993. Discussion of
Krugman’s “Lessons of Massachusetts for EMU.” In Adjustment and growth in the
EMU, ed. F. Torres and F. Giavazzi, 261-66.
Chamberlin, E. H. 1949. The theory
of monopolistic competition. 6th ed.
Chatterji, M. 1993. Convergence clubs
and endogenous growth.
Chipman, J. 1970. External economies of scale and competitive equilibrium. Quarterly Journal of Economics 84:347-85.
Collier, J. 1994. Regional disparities,
the Single Market and EMU. In Unemployment in
Commission of the European Communities.
1990. An empirical assessment of factors shaping regional competitiveness in
problem regions. Main report.
______ 1991. The regions in the
______ 1994. Competitiveness and
cohesion trends in the regions.
Conroy, M. 1975. The concept and measurement of regional industrial diversification. Southern Economic Journal 41:492-505.
Cooke, P. 1990. Manufacturing miracles:
The changing nature of the local economy. In Local economic policy, ed.
M. Campbell, 25-42.
Cooke, P., and Morgan, K. 1993. The network paradigm: New departures in corporate and regional development. Environment and Planning D: Society and Space 11:543-64.
David, P., and Rosenbloom, J. 1990. Marshallian factor market externalities and the dynamics of industrial localization. Journal of Urban Economics 2:349-70.
De Melo, J., and Robinson, 5. 1990.
Productivity and externalities: Models of export-led growth. Discussion
Dixit, A. K., and Norman, V. 1980.
Theory of international trade.
Drache, D., and Gertler, M., eds. 1991.
The new era of global competition: State policy and market power.
Dunford, M. 1993. Regional disparities in the EC. Evidence fi-om the REGIO data bank. Regional Studies 27:727-43.
Dunford, M., and Kalkalas, G., eds. 1992. Cities and
regions in the new
Economics of meaning, The. 1994. The Economist, 30 April, 13—14.
Eichengreen, B. 1993. European monetary unification. Journal of Economic Literature 31:1321-57.
Emerson, M.; Aujean, M.; and Catinat, M. 1988. The
economics of 1992.
Erickson, R. 1989. Export performance and state industrial growth. Economic Geography 65:280-92.
Ethier, W. 1982. National and international returns to scale in the modern theory of international trade. American Economic Review 72:389-405.
Friedman, B. 1994. Must we compete?
Fujita, M. 1989. Urban economic theory: Land use and
Geroski, P. A. 1989. The choice between scale and
diversity. In 1992: Myths and realities, ed.
Gertler, M. 1992. Flexibility revisited: Districts,
nation-states and the forces of production. Transactions of the
Gibb, R., and Michalak, W., eds. 1994. Continental
Glasmeier, A.; Thompson, J.; and Kays, A. 1993. The
geography of trade policy: Trade regimes and location decisions in the textile
and apparel complex. Transactions of the
Grabher, G. 1993. The embedded firm: On the
socioeconomics of industrial networks.
Grant, R. 1994. The geography of international trade. Progress in Human Geography 18: 298-312.
Grossman, G., and Helpman, E. 1991. Innovation and
growth in the global economy.
Hanink, D. 1988. An extended Linder model of international trade. Economic Geography 64:322-34.
______ 1994. The international economy: A
Hamrison, B. 1992. Industrial districts: Old wine in new bottles? Regional Studies 26:469-84.
Helpman, E. 1981. International trade in the presence of product differentiation, economies of scale and monopolistic competition. Journal of international Economics 11:305-40.
______ 1984. Increasing returns,
imperfect markets and trade theory. In Handbook of international economics,
Vol. 1, ed. R. Jones and P. Kenen, 325-65.
Helpman, E., and Krugman, P. 1985.
Market structure and foreign trade: Increasing returns, imperfect competition
and the international economy.
Hirschman, A. 1958. The strategy of
Hirst, P., and Zeithin, J., eds. 1989.
Reversing industrial decline?
Hoare, A. 1975. Linkage flows, locational evaluation, and industrial geography: A case study of Greater London. Environment and Planning A 7:41-58.
______ 1992. Review of P. Krugman’s “Geography and Trade.” Regional Studies 26:679.
Howes, C., and Markusen, A. 1993.
Trade, industry and economic development. In Trading industries, trading
regions, ed. H. Noponen, J.
Graham, and A. Markusen, 1-44.
Jackson, R. 1984. An evaluation of alternative measures of regional industrial diversification. Regional Studies 8:103-12.
Jaffe, A.; Trajtenberg, M.; and Henderson, R. 1993. Geographical localization of knowledge spillovers as evidenced by patent citations. Quarterly Journal of Economics 108:577-98.
Johnston, R. J. 1989. Extending the research agenda. Economic Geography 65:338-47.
______ 1992. Review of P. Krugman’s “Geography and Trade.” Environment and Planning A 24:1006.
Kaldor, N. 1978. The case for regional
policies. In Further essays on economic theory, 139-54.
______ 1981. The role of increasing
returns, technical progress and cumulative causation in the theory of
international trade and economic growth. Economic Appliquee 34 (4).
Reprinted in The essential Kaldor (1989), ed. F. Targetti and A.
______ 1985. Interregional trade and
cumulative causation. In Economics without equilibrium, 57-79.
Kitson, M., and Michie, J. 1995. Conflict, cooperation and change: The political economy of trade and trade policy. Review of International Political Economy 2 (4):632-57.
Knox, P., and Agnew, J. 1994. The
geography of the world economy. 2d ed.
Krugman, P. 1979. Increasing returns, monopolistic competition and international trade. Journal of International Economics 9:469-79.
______ 1980. Scale economies, product differentiation and the pattern of trade. Amercan Economic Review 70:950-59.
______ 1981. Trade, accumulation and uneven development. Journal of Development Economics 8:149-61.
______ 1983a. The “new theory” of
international trade and the multinational enterprise. In The multinational
corporation in the 1980s, ed. C. Kindleberger and D. Audretsch, 57-73.
______ 1983b. Targeted industrial
policies: Theory and evidence. In Structural change and public policy.
______ 1984. Foreign industrial targetting and the US economy. Brookings Papers on Economic Activity 1:77-121.
______ ed. 1986. Strategic trade
policy and the new international economics.
______ 1987a. The narrow moving band, the “Dutch disease” and the competitive consequences of Mrs. Thatcher. Journal of Development Economics 26:42-55.
______ 1987b. Is free trade passe? Economic Perspectives 1 (2):131-44.
______ 1987c. Increasing returns and
the theory of international trade. In Advances in economic theory, ed. T.
______ 1989. Economic integration in
______ 1990. Rethinking
______ 1991a. Geography and trade.
_______ 1991b. Increasing returns and economic geography. Journal of Political Economy 99:483-99.
______ 1991c. History versus expectations. Quarterly Journal of Economics 106:651-67.
______ 1991d. History and industrial location: The case of the manufacturing belt. American Economic Review (Papers and Proceedings) 81:80-83.
______ 1992. Currencies and crises.
______ 1993a. On the relationship between trade theory and location theory. Review of International Economics 1:110-22.
______ 1993b. The current case for
industrial policy. In Protectionism and world welfare, ed. D. Salvatore,
______ 1993c. First nature, second nature and metropolitan location. Journal of Regional Science 33 (2):129-44.
______ 1993d. The lessons of
Massachusetts for EMU. In Adjustment and growth in the European Monetary
______ 1993e. Inequality and the
political economy of Eurosclerosis. November.
______ 1994a. Competitiveness: A dangerous obsession. Foreign Affairs (March-April): 28-44.
______ 1994b. The age of diminished expectations: US economic policy in the 1990s. Rev. ed. London: MIT Press.
______ 1994c. Peddling prosperity: Economic sense and nonsense in the age of diminished expectations. New York: Norton.
______ 1994d. Does Third World growth hurt First World prosperity? Harvard Business Review (July-August): 113—21.
______ 1995. Development, geography and economic theory. Cambridge: MIT Press.
______ 1996. The self-organising economy. Cambridge, Mass.: Blackwehl Publishers.
Krugman, P., and Venables, A. 1990.
Integration and the competitiveness of peripheral industry. In Unity with
diversity in the European Community, ed. C. Bliss and J. Braga de Macedo,
______ 1994. Globalization and the
inequality of nations. Discussion paper 1015.
Kurre, J., and Weller, B. 1989. Regional cyclical instability. Regional Studies 24:318-29.
Lancaster, K. 1980. Intra-industry trade under perfect monopolistic competition. Journal of International Economics 10:151-76.
Losch, A. 1967. The economics of
Lovering, J. 1990. Fordism’s unknown successor. International Journal of Urban and Regional Research 14:159-74.
Lucas, R. 1988. On the mechanics of economic development. Journal of Monetary Economics 22:3-42.
Markowitz, H. 1959. Portfolio
selection and efficient diversification of investment.
Markusen, A. 1993. Trade as a regional
development issue: Policies for job and community preservation. In Trading
industries, trading regions, ed. H. Noponen, J. Graham, and A. Markusen,
Markusen, A., and Park, S. 0. 1993. New industrial districts: A critique and extension from the developing countries. Working paper, Project on Regional and Industrial Economics, Rutgers University.
Martin, P. J., and Rogers, C. A. 1994a. Industrial location and public infrastructure. Discussion paper 909. London: Centre for Economic Policy Research.
______ 1994b. Trade effects of regional aid. Discussion paper 910. London: Centre for Economic Policy Research.
Martin, R. L. 1993. Reviving the economic case for regional policy. In Spatial policy in a divided nation, ed. R. T. Harrison and M. Hart, 270-90. London: Jessica Kinglsey.
Meade, J. 1952. External economies and diseconomies in a competitive situation. Economic Journal 62:54-67.
Mishan, E. 1971. Externalities. Journal of Economic Literature 9:1-28.
Murphy, A.; Schleifer, A.; and Vishny, R. 1989. Industrialization and the big push. Journal of Political Economy 97:1003-26.
Myrdal, G. 1957. Economic theory and underdeveloped regions. London: Duckworth.
Neven, D. J., and Gouyette, C. 1994. Regional convergence in the European Community. Discussion paper 914. London: Centre for Economic Policy Research.
Noponen, H.; Graham, J.; and Markusen, A., eds. 1993. Trading industries, trading regions. London: Guilford Press.
Ohlin, B. 1933. Interregional and
Organization for Economic Cooperation
and Development (OECD). 1994. The OECD jobs study: Part 1. Labour market trends
and underlying forces of change.
Palmini, D.,and Cray, R.F., 1992, Convergence or divergence? A study of regional business cycle patterns among and within US census regions. Regional Science Perspectives 22(2):30-52.
Peschel, K. 1982. International trade, integration and industrial location. Regional Science and Urban Economics 12:247-69.
Phelps, N. 1992. External economies, agglomeration and
flexible accumulation. Transactions of the
Porter, M. E. 1990. The competitive advantage of nations. London: Macmillan.
______ 1994. The role of location in competition. Journal of the Economics of Business 1(1):35-39.
Pyke, F.; Becattini, G.; and Sengenberger, W., eds. 1989. Industrial districts and inter-firm co-operation in Italy. Geneva: Institute for Labour Studies.
Reich, R. B. 1991. The work of nations: Preparing ourselves for
21st century capitalism.
Romer, P. 1990. Endogenous technological change. Journal of Political Economy 98:71-102.
Rosenstein-Rodan, P. 1943. Problems of industrialization of Eastern and South-Eastern Europe. Economic Journal 53:202-11.
Sabel, C. 1989. Flexible specialization and the re-emergence of regional economies. In Reversing industrial decline? ed. P. Hirst and J. Zeitlin, 17-70. Oxford: Berg.
Samuelson, P. 1994. Preface. In The age of diminished expectations, ed. P. Krugman, vii. London: MIT Press.
Scitovsky, T. 1954. Two concepts of external economies. Economic Journal 62:52-67.
Scott, A. J. 1986. Industrial organization and location, divisons of labor and the firm’s spatial process. Economic Geography 62: 215-31.
______ 1988. New industrial spaces.
______ 1992a. The role of large producers in industrial districts: A case study of high-tech systems houses in Southern California. Regional Studies 26:265-75.
______ 1992b. The collective order of flexible production agglomeration: Lessons for local economic development policy and strategic choice. Economic Geography 68:219-33.
Scott, A. J., and Storper, M. 1992a. Regional development reconsidered. In Regional development and contemporary industrial response: Extending flexible specialization, ed.
H. Ernste and V. Meier, 1-24.
______ 1992b. Industrialization and regional development. In Pathways to industrialization and regional development, ed. M. Storper and A. Scott, 3-17. London: Rout-ledge.
Skott, P., and Auerbach, P. 1995. Cumulative causation and the “new” theories of economic growth. Journal of Post Keynesian Economics 17(3):381-402.
Smith, A. 1994. Imperfect competition and international trade. In Surveys in international trade, ed. D. Greenaway and A. Winters, 43-65. Oxford: Basil Blackwell.
Smith, N. 1989. Uneven development
theory and location theory: Towards a synthesis. In New models in geography,
Vol. 1, ed. R. Peet and N. Thrift, 142-63.
Steed, G. 1971. Internal organization, firm integration and locational change: The Northern Ireland linen complex, 1954—64. Economic Geography 47:371-83.
Stigler, G. 1951. The division of labour is limited by the extent of the market. Journal of Political Economy 59:185-93.
Stohr, W. B. 1989. Regional policy at
the crossroads. In Regional policy at the crossroads: European perspectives,
ed. L. Albrechts, F. Moulaert, P. Roberts, and
Storper, M. 1992a. Regional “worlds” of
production: Learning and innovation in the technology districts of
______ 1992b. The limits to globalization: Technology districts and international trade. Economic Geography 68:60-93.
Storper, M., and Walker, R. 1989.
The capitalist imperative: Territory, technology and industrial growth.
Sunley, P. J. 1992. Marshallian
industrial districts: The case of the
Thurow, L. 1994. Head to head: The
coming economic battle among Japan,
Tyson, L. 1992. Who’s bashing whom?
Trade conflict in high technology industries.
von Hagen, J., and Hammond, G. 1994.
Industrial localization: An empirical test for Marshallian localization
economies. Discussion paper 917.
Weber, A. 1929. Theory of the
location of industries.
Young, A. A. 1928. Increasing returns and economic progress. Economic Journal 38: 527—42.