The hypothesis that a region's or nation's laggard industrial development can be explained by its relatively more expensive supplies of coal and iron ore is challenged here. A simple model, based on location theory, is developed. Using this model, I demonstrate the conditions under which this hypothesis holds. A case study of Quebec and Ontario industry suggests that the differential resource cost hypothesis seriously lacks explanatory power.
ASJC Scopus subject areas
- Economics and Econometrics
- Economics, Econometrics and Finance (miscellaneous)