IDEAS home Printed from https://ideas.repec.org/p/kgu/wpaper/224.html
   My bibliography  Save this paper

Strategic investment and industry location in a footloose capital model of economic geography

Author

Listed:
  • Kenji Fujiwara

    (School of Economics, Kwansei Gakuin University)

Abstract

This paper examines how strategic investment of capitalists affects the industry location in a footloose capital model. We show that the home market effect is robust but is moderated when capitalists strategically invest. That is, the industry location is closer to dispersion when capitalists are strategic than when they are atomic.

Suggested Citation

  • Kenji Fujiwara, 2021. "Strategic investment and industry location in a footloose capital model of economic geography," Discussion Paper Series 224, School of Economics, Kwansei Gakuin University.
    • Handle: RePEc:kgu:wpaper:224
    as

    Download full text from publisher

    File URL: http://192.218.163.163/RePEc/pdf/kgdp224.pdf
    File Function: First version, 2021
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Li, Donghui & Nguyen, Quang N. & Pham, Peter K. & Wei, Steven X., 2011. "Large Foreign Ownership and Firm-Level Stock Return Volatility in Emerging Markets," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 46(4), pages 1127-1155, August.
    2. Richard Baldwin & Rikard Forslid & Philippe Martin & Gianmarco Ottaviano & Frederic Robert-Nicoud, 2005. "Economic Geography and Public Policy," Economics Books, Princeton University Press, edition 1, number 7524.
    3. James R. Bartkus & M. Kabir Hassan, 2009. "Specialization versus diversification in venture capital investing," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 17(2), pages 134-145, May.
    4. April Knill, 2009. "Should Venture Capitalists Put All Their Eggs in One Basket? Diversification versus Pure‐Play Strategies in Venture Capital," Financial Management, Financial Management Association International, vol. 38(3), pages 441-486, September.
    5. Martin, Philippe & Rogers, Carol Ann, 1995. "Industrial location and public infrastructure," Journal of International Economics, Elsevier, vol. 39(3-4), pages 335-351, November.
    6. Behrens, Kristian & Kichko, Sergey & Zhelobodko, Evgeny, 2014. "Competition in the traditional sector does not matter for the ‘Core–Periphery’ model," Economics Letters, Elsevier, vol. 122(1), pages 94-99.
    7. Richard Baldwin & Rikard Forslid & Philippe Martin & Gianmarco Ottaviano & Frederic Robert-Nicoud, 2005. "Economic Geography and Public Policy," Economics Books, Princeton University Press, edition 1, number 7524.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Commendatore, Pasquale & Kubin, Ingrid & Sushko, Iryna, 2022. "Big or small? A new economic geography model with an endogenous switch in the market structure," Chaos, Solitons & Fractals, Elsevier, vol. 161(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fujiwara, Kenji, 2021. "Strategic investment and industry location in a footloose capital model of economic geography," Economics Letters, Elsevier, vol. 203(C).
    2. Behrens, Kristian & Gaigne, Carl & Ottaviano, Gianmarco I.P. & Thisse, Jacques-Francois, 2007. "Countries, regions and trade: On the welfare impacts of economic integration," European Economic Review, Elsevier, vol. 51(5), pages 1277-1301, July.
    3. Picard, Pierre M. & Toulemonde, Eric, 2006. "Firms agglomeration and unions," European Economic Review, Elsevier, vol. 50(3), pages 669-694, April.
    4. Bagoulla, Corinne & Péridy, Nicolas, 2011. "Market access and the other determinants of North–South manufacturing location choice: An application to the Euro-Mediterranean area," Economic Systems, Elsevier, vol. 35(4), pages 537-561.
    5. Toshiaki Takahashi & Hajime Takatsuka & Dao-Zhi Zeng, 2013. "Spatial inequality, globalization, and footloose capital," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 53(1), pages 213-238, May.
    6. Kichko, Sergey & Kokovin, Sergey & Zhelobodko, Evgeny, 2014. "Trade patterns and export pricing under non-CES preferences," Journal of International Economics, Elsevier, vol. 94(1), pages 129-142.
    7. Zeng, Dao-Zhi & Zhao, Laixun, 2009. "Pollution havens and industrial agglomeration," Journal of Environmental Economics and Management, Elsevier, vol. 58(2), pages 141-153, September.
    8. Stefan Wrzaczek, 2014. "Social optimality in the constructed-capital model," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 22(1), pages 211-232, March.
    9. Hajime Takatsuka & Dao-Zhi Zeng, 2012. "Mobile capital and the home market effect," Canadian Journal of Economics, Canadian Economics Association, vol. 45(3), pages 1062-1082, August.
    10. Jens Südekum, 2005. "The Pitfalls of Regional Education Policy," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 61(3), pages 327-352, November.
    11. Wolfgang Eggert & Maximilian Von Ehrlich & Robert Fenge & Günther König, 2007. "Konvergenz‐ und Wachstumseffekte der europäischen Regionalpolitik in Deutschland," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(2), pages 130-146, March.
    12. Rainald Borck & Michael Pflüger & Matthias Wrede, 2010. "A simple theory of industry location and residence choice," Journal of Economic Geography, Oxford University Press, vol. 10(6), pages 913-940, November.
    13. Baldwin, Richard E. & Krugman, Paul, 2004. "Agglomeration, integration and tax harmonisation," European Economic Review, Elsevier, vol. 48(1), pages 1-23, February.
    14. Olga Ivanova & d'Artis Kancs & Dirk Stelder, 2009. "Modelling Inter-Regional Trade Flows: Data and Methodological Issues in Rhomolo," EERI Research Paper Series EERI RP 2009/31, Economics and Econometrics Research Institute (EERI), Brussels.
    15. Anne Musson, 2012. "The importance of the stakeholders’ involvement in building indicators. The case of environmental regulation in France," Working Papers hal-02947023, HAL.
    16. Paul Chiambaretto & André De Palma & Stef Proost, 2013. "A normative analysis of transport policies in a footloose capital model with interregional and intraregional transportation costs," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(3), pages 811-831, December.
    17. von Ehrlich, Maximilian & Seidel, Tobias, 2015. "Regional implications of financial market development: Industry location and income inequality," European Economic Review, Elsevier, vol. 73(C), pages 85-102.
    18. Ralph Ossa, 2011. "A "New Trade" Theory of GATT/WTO Negotiations," Journal of Political Economy, University of Chicago Press, vol. 119(1), pages 122-152.
    19. Nicholas Sheard, 2012. "Regional policy in a multiregional setting: when the poorest are hurt by subsidies," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(2), pages 403-423, June.
    20. Zhou, Yiming & Zeng, Dao-Zhi, 2015. "Offshoring, globalization, and welfare," The North American Journal of Economics and Finance, Elsevier, vol. 31(C), pages 75-93.

    More about this item

    Keywords

    Footloose capital model; Strategic investment; Industry location;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kgu:wpaper:224. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Toshihiro Okada (email available below). General contact details of provider: https://edirc.repec.org/data/dekgujp.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.