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Production location choice and risk aversion

Author

Listed:
  • Song-ken Hsu

    (Department of Industrial Economics, Tamkang University, Taipei 251, Taiwan)

  • Lin-ti Tan

    (Institute of Economics, Academia Sinica, Taipei 115, Taiwan)

Abstract

This paper attempts to provide a general comparative static analysis on a firm's choice of production location with respect to variations in the degree of risk aversion under demand price, input price, and technology uncertainties. Our analysis shows that whether and how the plant location varies with a change in the firm's degree of risk aversion depend upon the nature of the production technology and how the input and location choice affect risk. It also demonstrates that some of our results are new, while some are generalizations of those obtained by Martinich and Hurter (1982).

Suggested Citation

  • Song-ken Hsu & Lin-ti Tan, 2001. "Production location choice and risk aversion," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 35(2), pages 239-248.
    • Handle: RePEc:spr:anresc:v:35:y:2001:i:2:p:239-248
    Note: Received: January 2000/Accepted: July 2000
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    Citations

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    Cited by:

    1. Isik, Murat, 2003. "Environmental Regulation And The Optimal Location Of The Firm Under Uncertainty," 2003 Annual meeting, July 27-30, Montreal, Canada 22066, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

    More about this item

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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