Obtaining a hub position: A New Economic Geography analysis of industry location and trade network structures

Pasquale Commendatore, Ingrid Kubin, Iryna Sushko

Publication: Scientific journalJournal articlepeer-review


We present a linear New Economic Geography model with three regions, one remote region and two regions that entertain a trade agreement with low bilateral trade costs. Only one of these two integrated regions has the outside option to conclude an additional trade agreement with the remote region and to obtain a hub position. We show that the new trade agreement has a substantial impact on industry location and trade patterns and that the effects strongly depend upon level of integration between the initial two regions. It is not always the region with the outside option that profits from using it. Finally, we also show that higher firm mobility may lead to complex dynamics.
Original languageEnglish
Pages (from-to)148 - 172
Publication statusPublished - 2021

Austrian Classification of Fields of Science and Technology (ÖFOS)

  • 502001 Labour market policy
  • 502047 Economic theory
  • 502003 Foreign trade

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