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Productive public input, integration and agglomeration

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  • Ott, Ingrid
  • Soretz, Susanne

Abstract

This paper analyzes, within a regional growth model, the impact of a productive governmental input and integration on the spatial distribution of economic activity. In doing so, two benchmark cases (i) equal distribution, and (ii) agglomeration in the sense of a core-periphery structure as well as the corresponding transition processes are discussed. Integration is understood as enhancing inter-territorial cooperation and it describes the extent to which one region may benefit from the other region's public input. Both integration and the characteristics of the public input crucially affect whether or not agglomeration arises and hence to which extent economic activity is concentrated. Key results are: Intensifying integration reduces the strengths of agglomeration forces and the corresponding degree of concentration will be lower. Relative congestion leads to an overestimation of capital returns and capital growth in the core region is faster due to congestion thereby leading to suboptimally high concentration.

Suggested Citation

  • Ott, Ingrid & Soretz, Susanne, 2010. "Productive public input, integration and agglomeration," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 538-549, November.
  • Handle: RePEc:eee:regeco:v:40:y:2010:i:6:p:538-549
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    References listed on IDEAS

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    Cited by:

    1. Eddery Lam & Chi-Yin Wu, 2016. "The Economics of Inter-City Competition in Financial and Distribution Markets," Journal of Economics and Management, College of Business, Feng Chia University, Taiwan, vol. 12(1), pages 85-117, February.
    2. Chetan Ghate & Gerhard Glomm & Jialu Liu Streeter, 2016. "Sectoral Infrastructure Investments in an Unbalanced Growing Economy: The Case of Potential Growth in India," Asian Development Review, MIT Press, vol. 33(2), pages 144-166, September.
    3. Ott, Ingrid & Soretz, Susanne, 2014. "Public policies, growth, and agglomeration," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100573, Verein für Socialpolitik / German Economic Association.
    4. Juntip Boonprakaikawe & Frédéric Tournemaine, 2014. "On the Macroeconomic Impact of a Regional Development Policy with Endogenous Residential Choice," The Review of Regional Studies, Southern Regional Science Association, vol. 44(1), pages 75-100, Spring.

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