This paper develops a simple model of spatial sorting where the least productive entrepreneurs are drawn to the large core region. This is an unusual feature. The literature on spatial sorting typically shows how the most productive individuals and firms agglomerate to the core. However, our model is consistent with empirical evidence that reveals that large agglomerations also attract the low skilled.
- heterogeneous firms
- spatial sorting
ASJC Scopus subject areas
- Geography, Planning and Development
- Economics, Econometrics and Finance(all)
- Statistics, Probability and Uncertainty
- Earth and Planetary Sciences (miscellaneous)