Advanced Search
MyIDEAS: Login

Spatial Allocation of Capital: The Role of Risk Preferences

Contents:

Author Info

  • Udo Broll
  • Antonio Rold�n-Ponce
  • Jack Wahl
Registered author(s):

    Abstract

    Abstract This paper considers a model of spatial allocation of investment capital under uncertainty. We demonstrate that the spatial concentration of economic activity depends upon properties of risk preferences deeper than risk aversion. The degree of so-called relative prudence unambiguously decides whether or not the diversification of income risk favours the geographic dispersion of economic activity. In our framework we relate risk diversification with economic integration. Then there exists risk preferences so that spatial concentration of industry and capital is not affected by the degree of economic integration or segmentation of the regions. We also study the impact of net return regressibility upon spatial allocation. Affectation spatiale du capital: le r�le des pr�f�rences de risques R�SUM� La pr�sente communication se penche sur un mod�le d'application spatiale du capital-investissement en pr�sence d'incertitudes. Nous d�montrons que la concentration spatiale de l'activit� �conomique est tributaire de propri�t�s de pr�f�rences de risque plus profondes que l'aversion au risque. Le degr� de la soi-disant prudence relative d�cide sans ambigu�t� si la diversification des risques de revenus favorise la dispersion g�ographique de l'activit� �conomique. Dans le cadre de notre �tude, nous examinons la diversification du risque en fonction de l'int�gration �conomique. Il existe �galement des pr�f�rences de risque, qui font en sorte que la concentration spatiale de l'industrie et du capital n'est pas affect�e par le degr� d'int�gration �conomique de la segmentation des r�gions. Asignaci�n espacial de capital: la funci�n de las preferencias de riesgo EXTRACTO Este trabajo considera un modelo de asignaci�n espacial de capital de inversi�n en situaci�n incierta. Demostramos que la concentraci�n espacial de actividad econ�mica depende m�s profundamente de las propiedades de las preferencias de riesgo que de la aversi�n al riesgo. El grado de la llamada prudencia relativa decide sin ambig�edad si la diversificaci�n del riesgo de ingresos favorece, o no, la dispersi�n geogr�fica de la actividad econ�mica. En nuestro marco, relacionamos la diversificaci�n del riesgo con la integraci�n econ�mica. Asimismo, existen preferencias de riesgos para que la concentraci�n espacial de la industria y el capital no sean afectados por el grado de integraci�n o segmentaci�n econ�mica de las regiones.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.taylorandfrancisonline.com/doi/abs/10.1080/17421772.2010.516442
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Spatial Economic Analysis.

    Volume (Year): 5 (2010)
    Issue (Month): 4 ()
    Pages: 389-398

    as in new window
    Handle: RePEc:taf:specan:v:5:y:2010:i:4:p:389-398

    Contact details of provider:
    Web page: http://www.tandfonline.com/RSEA20

    Order Information:
    Web: http://www.tandfonline.com/pricing/journal/RSEA20

    Related research

    Keywords: Spatial allocation; inter-regional disparity; risk aversion; prudence; regression; D81; R12; R30; R38;

    Find related papers by JEL classification:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:taf:specan:v:5:y:2010:i:4:p:389-398. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.