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The effect of capital flow on the agglomeration evolution of footloose entrepreneurs

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  • Ching-mu Chen

    (Zhongnan University of Economics and Law)

Abstract

To answer whether capital mobility exacerbates or dampens the agglomerative tendency of footloose entrepreneurs, this paper incorporates a footloose capital with a footloose-entrepreneur manufacturing industry based on a tractable analytical structure with two identical regions. The model shows that these two sectors interact with each other, and features five types of equilibrium configurations. Most interestingly, this paper finds that the mobility of physical capital plays a stabilizing role in the catastrophic agglomeration caused by footloose entrepreneurs.

Suggested Citation

  • Ching-mu Chen, 2019. "The effect of capital flow on the agglomeration evolution of footloose entrepreneurs," Asia-Pacific Journal of Regional Science, Springer, vol. 3(3), pages 761-791, October.
    • Handle: RePEc:spr:apjors:v:3:y:2019:i:3:d:10.1007_s41685-019-00109-8
    DOI: 10.1007/s41685-019-00109-8
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    Cited by:

    1. Fu-Chuan Lai, 2019. "Special feature in honor of Shin-Kun Peng," Asia-Pacific Journal of Regional Science, Springer, vol. 3(3), pages 757-759, October.

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    More about this item

    Keywords

    Footloose capital; Footloose entrepreneur; Pitchfork bifurcation; Agglomeration evolution; New economic geography;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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