Emergence of Industrial Hierarchy in One-dimensional Space: Bifurcation Analysis of a Multi-industry Urban Location Model with Communication Externality

Abstract

 The purpose of this paper is to show how industrial hierarchy emerges in a city. Extending the single-industry model of Takayama and Akamatsu (2010), we construct the multi-industry location model with communication externality. Furthermore, we extend the method of bifurcation analysis proposed by Takayama and Akamatsu to analyze this model. The analysis discloses that asymmetric interactions among industries lead to emergence of industrial hierarchy.