Citation

Mahmud AS. Netw. Spat. Econ. 2021; 21(2): 419-464.

Copyright

(Copyright © 2021, Holtzbrinck Springer Nature Publishing Group)

DOI

10.1007/s11067-021-09529-6

PMID

unavailable

Abstract

The paper describes the formation of a rural-urban network in which urban areas decide to form links with other urban as well as rural regions. Furthermore, we illustrate how the presence of network can induce agglomeration. Urban areas are mainly production centers of manufacturing goods, and the rural regions that of agriculture. Both regions need to form a network to trade with one another. Network formation occurs in the presence of transportation and network formation costs. The equilibrium rural-urban network is formed when regions attempt to minimize transportation cost as well as the total cost of forming links in a network. The paper illustrates how network structure itself can create agglomeration apart from the processes described in the literature. Manufacturing firms locate to a single area to create a hub that has direct links to rural regions and rural-urban trade proceeds with minimum transportation costs and a minimum number of links.

Language: en

Keywords

Agglomeration; Network formation