ABSTRACT
The geographical location and natural conditions made the development of Europe’s most important cross-border economic region possible, but entrepreneurs and companies used these opportunities and created the economic reality: small, medium-sized and large international firms and (inter)national cartels shaped the Lower Rhine economy. Germany’s 19th century industrialisation and Dutch economic liberalisation created a transnational economic region. The New Economic Geography, of which Krugman is the most prominent representative, started by observing that economic activity concentrates in agglomerations that can only be explainable by regional competitiveness. The Rhine river basin is a region where culture, language and geography provide minimal obstacles to economic contacts. The nature of the industry, asset specificity, sunk costs, economies of scale and regulation are factors that determine to what extent flows are footloose or fixed. The chapter also presents an overview of the key concepts discussed in this book.
