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"An important element of the cost of distance is time taken in delivering final and intermediate goods. We argue that time costs are qualitatively different from direct monetary costs such as freight charges. The difference arises because of uncertainty. Unsynchronised deliveries can disrupt production, and delivery time can force producers to order components before demand and cost uncertainties are resolved. Using several related models we show that this generates hitherto unexplored incentives for clustering. If final assembly takes place in two locations and component production has increasing returns to scale, then component production will tend to cluster around just one of the assembly plants"--National Bureau of Economic Research web site.
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Timeliness, trade and agglomeration
2004, Centre for Economic Performance, London School of Economics and Political Science
Electronic resource
in English
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Timeliness, trade and agglomeration
2004, National Bureau of Economic Research
Electronic resource
in English
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Book Details
Edition Notes
Includes bibliographical references.
Title from PDF file (viewed on Dec. 6, 2004).
"February 2004."
Also available in print.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.
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