A Study on the Core-Periphery Patterns by Analytically Solvable Multi-Regional New Economic Geography Model

Abstract

In previous studies on theoretical new economic geography, a 2 regions framework and numerical analysis framework have been adopted. However, these 2 frameworks create problems in the study of empirical research. The 2-regional model is not good for research on core-periphery patterns of multi-regional transportation improvements. Whereas, the numerical analysis is theoretically difficult to understand what parameters affect the conclusion. In this study, I constructed a new economic geography model with 5 linear regions in a theoretical and analytically solvable framework and analyzed the core-periphery patterns across regions in transportation improvements for each link. The main conclusions are as follows. Under the circumstances of autarky economy or symmetry equilibrium transport costs were very high, and all link improvements across all regions brought straw effects to the fringe region. Also for single link improvements, the number of firms increasing in the regions that directly improved transport costs across each region and the number of firms decreasing in regions that were not directly connected across regions were elucidated. The number of firms increased in regions where transportation was linked with another region improved directly. On the other hand, the number of firms decreasing in regions where transportation was linked with another region improved indirectly.