Economic geography and endogenous determination of transport technology

This paper studies the interdependence of economic geography and transport technology. A two-region model is used to obtain the conditions for the modern transport technology to be adopted in an economy. In particular, the impact of economic geography upon the adoption of the modern technology is examined. Furthermore, I discuss what combination of economic geography (symmetric or core–periphery pattern) and transport technology (traditional or modern technology) is to be realized in an economy.