The strength of vertical linkages
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The strength of vertical linkages. / Kranich, Jan.
Lüneburg : Institut für Volkswirtschaftslehre der Universität Lüneburg, 2006. (Working paper series in economics; Nr. 20).Publikation: Arbeits- oder Diskussionspapiere und Berichte › Arbeits- oder Diskussionspapiere
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TY - UNPB
T1 - The strength of vertical linkages
AU - Kranich, Jan
N1 - Literaturverz. S. 32 - 33
PY - 2006
Y1 - 2006
N2 - This paper discusses the interdenpendencies that exist between vertically-linked industries in the (Spence-)Dixit-Stiglitz model of monopolistic competition. The main objective is to develop a concept for quantifying the magnitude of sectoral coherence in models of the New Economic Geography. It is motivated by the suggestion, by Venables (1996), that `strategic industries` be identified in terms of their agglomeration potential. Using a partial-analytic approach, we focus on inter-industrial relations in a closed economy to draw conclusions regarding international trade. We ascertain that two factors have an impact upon the strength of industrial linkages: 1) the monopolistic scope of intermediate suppliers, in terms of (technical) substitution elasticity; and the share in downstream costs for intermediates. Within a simulation study, this paper applies this new theoretical concept to eight basic industries across ten European countries.
AB - This paper discusses the interdenpendencies that exist between vertically-linked industries in the (Spence-)Dixit-Stiglitz model of monopolistic competition. The main objective is to develop a concept for quantifying the magnitude of sectoral coherence in models of the New Economic Geography. It is motivated by the suggestion, by Venables (1996), that `strategic industries` be identified in terms of their agglomeration potential. Using a partial-analytic approach, we focus on inter-industrial relations in a closed economy to draw conclusions regarding international trade. We ascertain that two factors have an impact upon the strength of industrial linkages: 1) the monopolistic scope of intermediate suppliers, in terms of (technical) substitution elasticity; and the share in downstream costs for intermediates. Within a simulation study, this paper applies this new theoretical concept to eight basic industries across ten European countries.
KW - Economics
KW - New Economic Geography
KW - Vertical Linkages
M3 - Working papers
T3 - Working paper series in economics
BT - The strength of vertical linkages
PB - Institut für Volkswirtschaftslehre der Universität Lüneburg
CY - Lüneburg
ER -