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Regional Policy, Integration and the Location of Industry in a Multiregion Framework

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Author Info
Forslid, Rikard
Abstract

This Paper analyses the interaction of economic integration and some typical regional policies in a new economic geography model with three regions of different size. The policies analysed are when the government controls the location of industry through location permits, infrastructure investments, and subsidies to the establishment of industry. It is shown how regional policy can easily be misdirected. The existing literature almost entirely focuses on two-region cases. This Paper instead analytically analyses a three-region case with asymmetric regions. The introduction of a third region gives several new insights. In particular the locational consequences for the region of intermediate size can generally not be inferred from a two-region case.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4630.

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Date of creation: Sep 2004
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Handle: RePEc:cpr:ceprdp:4630

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Related research
Keywords: agglomeration; multiregion-model; new economic geography; regional policy;

Find related papers by JEL classification:
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
F15 - International Economics - - Trade - - - Economic Integration
F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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This page was last updated on 2009-12-31.

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