TY  - JOUR
AU  - Harrigan,James
AU  - Venables,Anthony J.
TI  - Timeliness, Trade and Agglomeration
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10404
PY  - 2004
Y2  - April 2004
UR  - http://www.nber.org/papers/w10404
L1  - http://www.nber.org/papers/w10404.pdf
N1  - Author contact info:
James Harrigan
Department of Economics
University of Virginia
P.O. Box 400182
Charlottesville, VA 22904-4182
Tel: 434-243-8354
Fax: 434-982-2904
E-Mail: harrigan@nber.org

Anthony Venables
Department of Economics
University of Oxford
Manor Road Building
Manor Road
Oxford OX1 3UQ, United Kingdom
and CEPR
E-Mail: tony.venables@economics.ox.ac.uk
AB  - An important element of the cost of distance is time taken in delivering final and intermediate goods. We argue that time costs are qualitatively different from direct monetary costs such as freight charges. The difference arises because of uncertainty. Unsynchronised deliveries can disrupt production, and delivery time can force producers to order components before demand and cost uncertainties are resolved. Using several related models we show that this generates hitherto unexplored incentives for clustering. If final assembly takes place in two locations and component production has increasing returns to scale, then component production will tend to cluster around just one of the assembly plants.
ER  -