The international division of industries: Clustering and comparative advantage in a multi-industry model

We consider a model with a large number of industries and agglomeration for ces which cause each industry to concentrate in a single country. We show t hat the division of industries between countries is not unique, and that id entical countries might have different numbers of industries and different wages and real incomes. Countries may gain by using policy to grab a higher proportion of world industry. Bounds on the set of equilibrium divisions o f industry are found and we show how, with Ricardian differences in technol ogy, there are equilibria with industries locating in the country where the y have a comparative disadvantage.