مدل دو منطقه ای با دو نوع از فن آوری های تولید و تراکم

A two-region model is proposed in this paper. Manufactured goods can be produced with cottage technology under constant returns to scale or with modern technology using differentiated intermediate goods, which are produced with increasing returns to scale technology. In the model, there may be multiple equilibria, and, in such cases, the initial conditions determine the equilibrium that the economy reaches. It is shown that strong increasing returns due to specialization and low transportation costs bring about industrialization with agglomeration. This framework explains the mechanism behind the different industrialization process in Japan and in less developed countries.

This paper presents a development model with two regions. In the model, manufactured goods can be produced with cottage technology under constant returns to scale or with modern technology using differentiated intermediate goods, which are produced with increasing returns to scale technology. The process of transition of manufacturing production from cottage to modern technology is called “industrialization.” Our focus is on the two basic factors of industrialization. One is a high level of increasing returns due to specialization. The other is low transportation costs, which enable technologies with increasing returns to operate. Young (1928) said that the increasing returns due to specialization are the basic component of economic development. A large, geographically clustered population is required to enable a high level of increasing returns due to specialization. Our model suggests that low transportation costs and a high level of increasing returns due to specialization bring about industrialization with agglomeration. In the model, a large market is realized under low transportation costs, which contribute to industrialization.1 In this framework, the model has four types of potentially realizable stable equilibria: pure cottage technology, symmetric modern technology, intermediate agglomeration, and full agglomeration. In the pure cottage technology equilibrium, all manufactured goods are produced with cottage technology, and the location of the manufacturing workers is symmetric. In the symmetric modern-technology equilibrium, manufactured goods are produced with modern technology in both regions, and the location of manufacturing workers is symmetric. In the intermediate agglomeration equilibrium, manufactured goods are produced with modern technology in one region, while, in another region, they are produced with cottage technology. In this equilibrium, more manufacturing workers locate in the industrialized region than in another region. In the full-agglomeration equilibrium, manufactured goods are produced with modern technology, and all manufacturing activities agglomerate in one region. In some parameter values, the model has multiple equilibria. When the economy has multiple equilibria, initial conditions determine the equilibrium that the economy reaches.2 From a theoretical point of view, our approach is closely related to two existing theories. One is the theory of new economic geography developed by Krugman (1991) and Fujita et al. (1999), and the other is the development theory presented by Murphy et al. (1989) and Matsuyama (1992). The new economic geography, which developed during the last decade, focuses on the interrelationship between increasing returns to scale and transportation costs. In those models, when the transportation costs are low, the economic activities tend to cluster due to a linkage effect. In existing models of new economic geography, manufactured goods are produced only with the technology of increasing returns to scale.3 In development models, such as those by Murphy et al. (1989) and Matsuyama (1992), manufactured goods can be produced with two types of technologies, cottage and modern, which emphasize the role of the pecuniary externality arising from increasing returns to scale technology. In those models, increasing returns to scale technology brings positive profits because the entries are constrained. Those positive profits enlarge the market and make possible the operation of technologies that rely on increasing returns. However, their model has no spatial aspect.4 In the real world, the spatial agglomeration of economic activities and industrialization are closely related. Indeed, the emergence of large cities is a fact that Kuznets (1966) associates with industrialization. The strong positive correlation between industrialization and geographic clustering of economic activities has been mentioned by economic historians. For example, Bairoch (1988), Hohenberg and Lees (1985), and Reynolds (1983), in particular, have written about the industrial revolution in Europe during the 19th century. In their writings, these researchers note that the process of industrialization with agglomeration shows various patterns. For example, Puga (1998) pointed out that, in less developed countries, the pattern and size of urban agglomeration diverge from what can be observed in the more developed regions, and, particularly, in European countries in the 19th century. In general, European countries have developed a more balanced system of cities than less developed countries. Puga (1998) emphasized that the factors that explain these differences between European countries and less developed countries were higher costs of spatial interaction (transportation costs), weaker economies of scale, and a less elastic supply of labor into the urban sector in Europe than in less developed countries. Japan experienced a balanced industrialization process in the early period of industrialization that took place in the 19th century. For example, in Japan, there were two representative industrialized cities, Tokyo and Osaka. However, since the 1960s, Tokyo has been the main industrial city in Japan. Thus, in Japan, agglomeration occurred after industrialization. On the other hand, as Puga (1998) said, in less developed countries, industrialization and agglomeration are simultaneous processes. In this paper, we explain the mechanism behind the different industrialization processes in Japan and that in less developed countries. These facts suggest that there are some patterns of industrialization and agglomeration. There is a strong correlation between industrialization and agglomeration patterns. Thus, it is important to analyze industrialization in a model that has a spatial aspect. The framework of our model, in which manufactured goods can be produced in two regions with two types of technologies, examines the strong correlation between the industrialization and agglomeration patterns. The model shows that the high level of increasing returns due to specialization belongs to modern technology and that low transportation costs are the main factor that determines the industrialization pattern. The paper is organized as follows: Section 2 is a presentation of the model. Section 3 is a presentation of the relationship between the manufacturing technologies and agglomeration patterns. Section 4 offers a discussion of the interpretation of our model, the history of the industrialization process, and the mechanism behind the different industrialization process in Japan and in less developed countries. Section 5 is the conclusion.

In this paper, we discussed the role of low transportation costs and the high level of increasing returns due to specialization in the process of industrialization and agglomeration. This is a topic that has long been discussed by researchers such as Bairoch (1988), Reynolds (1983), and Rosenstein-Rodan (1943). We have constructed a model in which low transportation costs and a high level of increasing returns due to specialization play essential roles in the process of industrialization and agglomeration. From a methodological viewpoint, the contribution of our model is to integrate a model of new economic geography, as had been done by Krugman (1991) and Fujita et al. (1999), into development models such as those of Murphy et al. (1989) and Matsuyama (1992). From a theoretical viewpoint, interesting conclusions are derived both for the location and development theories. In the model, low transportation costs and a high level of increasing returns due to specialization cause the economy to undergo industrialization with agglomeration. In the model, the initial condition determines the equilibrium that the economy reaches when the economy has multiple equilibria. Within these frameworks, our model presents some patterns of industrialization and agglomeration and explains the mechanism behind the different industrialization processes in Japan and in less developed countries. If the level of increasing returns due to specialization with modern technology is low, it would be impossible for an economy to become industrialized. The level of increasing returns due to specialization is the key parameter that determines the pattern of industrialization and agglomeration in our model. Low transportation costs bring about agglomeration in an industrialized economy. With our model, we can see that these relationships play important roles in the process of industrialization.