Technology, Agglomeration, and Regional Competition for Investment
AbstractThe active "courting" of firms by municipalities, regions, and even nations has a long-standing history and the competition for firm location through a wide variety of incentives seems to have escalated to new heights in recent years. We develop a model that explores technology development by firms that face regional competition for their investment and examine the endogenous determination of regions’ policies, firm technology, and agglomeration externalities. In particular, we find that regional competition leads firms to inefficiently distort their development and selection of production technology in hopes of improving their standing in the competition amongst regions for their investment. This loss in efficiency is aggravated by the agglomeration externalities that are inherently present in many industries. We offer several case studies that provide evidence consistent with our theoretical conclusions.
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Bibliographic InfoPaper provided by University of Oregon Economics Department in its series University of Oregon Economics Department Working Papers with number 2003-21.
Date of creation: 01 Sep 2003
Date of revision: 01 Sep 2003
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Other versions of this item:
- Bruce A. Blonigen & Van Kolpin, 2007. "Technology, agglomeration, and regional competition for investment," Canadian Journal of Economics, Canadian Economics Association, vol. 40(4), pages 1149-1167, November.
- Bruce A. Blonigen & Van Kolpin, 2002. "Technology, Agglomeration, and Regional Competition for Investment," NBER Working Papers 8862, National Bureau of Economic Research, Inc.
- Bruce A. Blonigen & Van Kolpin, 2001. "Technology, Agglomeration, and Regional Competition for Investment," University of Oregon Economics Department Working Papers 2001-10, University of Oregon Economics Department, revised 01 Jun 2001.
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
This paper has been announced in the following NEP Reports:
- NEP-GEO-2003-09-14 (Economic Geography)
- NEP-MIC-2003-09-14 (Microeconomics)
- NEP-PBE-2003-09-14 (Public Economics)
- NEP-URE-2003-09-14 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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