Economic geography and the distribution of profits

P.M. Picard, J.-F. Thisse, E. Toulemonde

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Résumé

In modern economies, the amount of profits distributed to shareholders is far from being negligible. We show that the way they are distributed among agents matters for the space-economy. For example, the existence of mobile rentiers is sufficient to make the symmetric configuration unstable for all transport cost values and to allow for the partial agglomeration of firms. Obviously, to account for profits and for their distribution, the assumption of free entry must be abandoned. So doing, we ignore fixed costs and show that it is the combination of imperfect competition and firms' indivisibility that matters for the formation of agglomeration in economic geography.
langue originaleAnglais
Pages (de - à)144-167
Nombre de pages24
journalJournal of Urban Economics
Volume56
Numéro de publication1
Les DOIs
Etat de la publicationPublié - 1 juil. 2004

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