The empirics of spatial competition: Evidence from European regions
AbstractThe New Economic Geography literature allows detailed analysis of the factors that determine the location decisions of firms in integrated markets. However, the competitive process is modelled in a rather rudimentary way, and the empirical evidence has usually been obtained from reduced-form econometric specifications. This study describes a structural model that takes into account strategic interactions between firms. We investigate the relationship between the degree of perceived competition not only from local firms but from firms in other regions and geographic concentration. The preliminary results indicate that, in aggregate terms, local firms present stronger competition than firms in other regions. Moreover, it is confirmed that greater geographical concentration of production reduces market power, due to the intensification of local competition; however, its impact on production costs is unclear.
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Bibliographic InfoPaper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number 150.
Length: 25 pages
Date of creation: 2006
Date of revision:
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Other versions of this item:
- Néstor Duch Brown, 2007. "The empirics of spatial competition: evidence from european regions," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2007(1), pages 35-60.
- R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis
- F15 - International Economics - - Trade - - - Economic Integration
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-11-25 (All new papers)
- NEP-COM-2006-11-25 (Industrial Competition)
- NEP-CSE-2006-11-25 (Economics of Strategic Management)
- NEP-GEO-2006-11-25 (Economic Geography)
- NEP-MIC-2006-11-25 (Microeconomics)
- NEP-URE-2006-11-25 (Urban & Real Estate Economics)
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