The Location Problem of International Trade in Used Auto Parts

Abstract

Trade in secondhand goods between countries is embedded in the global circular economy. The regional agglomeration of used auto parts dealers plays an important role in this process. Geographical agglomeration is essential for realizing the economic attributes of secondhand goods and the secondhand goods industry, which are characterized by small scale, supply instability, and information asymmetry. This chapter examines the advantages of agglomeration that are observed on the export and import sides. In Japan, used auto parts dealers have tended toward decentralization for many years as a result of the long-running and well-developed network of dismantlers. However, as globalization advances, agglomeration becomes more advantageous, so centralization in specific areas is now observed. On the import side, the cases of the cities of Colombo and Sharjah make it clear that the larger the volume of trade, the more important a centralized sorting function becomes, which is an advantage of agglomeration.