Infrastructure and Industrial Location in LDCs
AbstractDistinguishing between national and international infrastructure, this paper investigates how differences in infrastructure quality may affect the location of firms between countries. The paper employs a model which is particularly well suited for the less-developed-country (LDC) context. The main results are as follows: (i) improvements in international infrastructure stimulates decentralization of industrial activity between countries; (ii) differences in national infrastructure quality make firms locate in the county with the superior national infrastructure; (iii) if a country's overall infrastructure is insufficiently superior, firms may choose to locate in separate countries. In an extension to the model, a formal sector wage premium is introduced. This creates potential market failure, and a role for government intervention.
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Bibliographic InfoPaper provided by Norwegian School of Economics and Business Administration- in its series Papers with number 11/99.
Length: 14 pages
Date of creation: 1999
Date of revision:
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Postal: NORWEGIAN SCHOOL OF ECONOMICS AND BUSINESS ADMINISTRATION, HELLEVEIEN 30, 5035 BERGEN SANDVIKEN NORWAY.
Phone: 5595 9000
Fax: 5595 9100
Web page: http://www.nhh.no/
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ECONOMIC INTEGRATION ; TRADE ; ECONOMIC DEVELOPMENT;
Find related papers by JEL classification:
- O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
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