Haunschild, P. 1993. The impact of interlocks on corporate acquisition activity. When Agglomeration Economies Are Important, Journal of Urban Economics, Vol. 45, No. 2, March 1999, pp. In the model, there are agglomeration benefits from concentrating industry in a particular location because it enables a large variety of local suppliers to emerge.
Firms differ by the extent to which they purchase from local suppliers.
When the industry migrates, the lowest-tier products move first. Jaffe, A. 1986. Geographic localization of knowledge spillovers as evidenced by patent citations. Krugman, P. 1991b. Geography and Trade.