J. Vernon Henderson|Tim Squires|Adam Storeygard|David Weil
The Global Distribution of Economic Activity: Nature, History, and the Role of Trade1
London School of Economics and Political Science|Amazon (Germany)|Tufts University|National Bureau of Economic Research|Brown University
abstract explore role natural characteristics determining worldwide spatial distribution economic activity proxied lights night observed across 240000 grid cells parsimonious set 24 physical geography attributes explains 47 worldwide variation 35 withincountry variation lights divide geographic characteristics two groups primarily important agriculture primarily important trade confront puzzle examining withincountry variation lights among countries developed early agricultural variables incrementally explain 6 times much variation lights trade variables among late developing countries ratio 15 even though latter group far dependent agriculture correspondingly marginal effects agricultural variables group lights larger absolute value trade smaller early developers late developers show apparent puzzle explained persistence differential timing technological shocks two sets countries early developers structural transformation due rising agricultural productivity began transport costs still high cities localized agricultural regions transport costs fell agglomerations persisted latedeveloping countries transport costs fell structural transformation exploit urban scale economies manufacturing agglomerated relatively often coastal locations consistent explanation countries developed earlier spatially equal distribution education economic activity late developers