Is insularity a locational disadvantage? Insights from the New Economic Geography
|Title||Is insularity a locational disadvantage? Insights from the New Economic Geography|
|Publication Type||Working Paper|
|Year of Publication||2015|
|Keywords||Industry Location, Insularity, New Economic Geography, trade|
This paper investigates the economic implications of being an island from the perspective of the New Economic Geography (NEG) literature. We review and discuss some existing NEG models which can be useful to generate empirical predictions for the insular territories and we outline a theoretical framework aiming at explicitly modeling the problem of insularity. We propose answers to the following research questions: Is insularity a threat for economic performances? In which cases and why does it represent a disadvantage? Which are, if any, the optimal policies able to compensate for this disadvantage?