Technology, agglomeration, and regional competition for investment
AbstractCompetition for firms by region has a long-standing history, and the academic literature has debated whether such competition is efficient. We develop a model that explores technology development by firms facing regional competition for their investment and examine the endogenous determination of region policy, firm technology, and agglomeration externalities. We find a new source of inefficiency - regional competition leads firms to inefficiently distort their development and selection of production technology to improve their standing in the regional competition for their investment. We show that these inefficient firm decisions on technology and location can also weaken agglomeration externalities.
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Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 40 (2007)
Issue (Month): 4 (November)
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Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4
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Other versions of this item:
- Bruce A. Blonigen & Van Kolpin, 2001. "Technology, Agglomeration, and Regional Competition for Investment," University of Oregon Economics Department Working Papers 2001-10, University of Oregon Economics Department, revised 01 Jun 2001.
- Bruce A. Blonigen & Van Kolpin, 2002. "Technology, Agglomeration, and Regional Competition for Investment," NBER Working Papers 8862, National Bureau of Economic Research, Inc.
- Bruce A. Blonigen & Van Kolpin, 2003. "Technology, Agglomeration, and Regional Competition for Investment," University of Oregon Economics Department Working Papers 2003-21, University of Oregon Economics Department, revised 01 Sep 2003.
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
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