IDEAS home Printed from https://ideas.repec.org/p/dun/dpaper/187.html
   My bibliography  Save this paper

Competition Between Regions With Respect To Industrial Support – A Theoretical Model

Author

Listed:
  • J.H.L. Dewhurst

Abstract

In recent years it seems that both regions and cities appear to have become more eager to present themselves as regions or cities in which new or mobile firms in certain industrial sectors (especially perhaps biotechnology) should locate. At the same time, in the UK at least, there has been devolution of the administration of regional policy, albeit with specific targets being set by the national government. Thus cities and regions have become, at least in part, more able to combine their publicity with financial support for the particular industrial sector they wish to foster. In this paper a model is developed which has the following properties. Cities allocate monies between two types of expenditure, (i) support for a nascent industry and (ii) support for social policies, with payoffs that differ for different cities. It is shown that, if firms in the nascent industry are attracted by relatively high levels of support, cities will generally spend more on industrial support than the national government would. This simple model is similar to those developed in the literature on Tax Competition. This feature allows a commentary to be made on both the policy implications and possible extensions of the model.

Suggested Citation

  • J.H.L. Dewhurst, 2006. "Competition Between Regions With Respect To Industrial Support – A Theoretical Model," Dundee Discussion Papers in Economics 187, Economic Studies, University of Dundee.
  • Handle: RePEc:dun:dpaper:187
    as

    Download full text from publisher

    File URL: http://www.dundee.ac.uk/media/dundeewebsite/economicstudies/documents/discussion/DDPE_187.pdf
    Download Restriction: no

    Other versions of this item:

    More about this item

    Keywords

    Regional Policy; Industrial Support; Fiscal Externalities;

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

    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:dun:dpaper:187. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Andrzej Kwiatkowski). General contact details of provider: http://edirc.repec.org/data/dedunuk.html .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.