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Anti-agglomeration Subsidies with Heterogeneous Firms

This paper studies anti-agglomeration subsidies in a core-periphery setting when firms are heterogeneous in terms of efficiency, focusing on the positive and normative effects of various subsidy forms (specific versus proportional), various tax-financing schemes (local versus global) and various capital-labour endowment ratios (symmetric versus asymmetric). Anti-agglomeration subsidies are shown to have ambiguous welfare effects and the determinants of the sign and size of the welfare impact are characterised.

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File URL: http://repec.graduateinstitute.ch/pdfs/Working_papers/HEIWP16-2006.pdf
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Paper provided by Economics Section, The Graduate Institute of International Studies in its series IHEID Working Papers with number 16-2006.

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Length: 28
Date of creation: Mar 2006
Date of revision:
Handle: RePEc:gii:giihei:heiwp16-2006
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  3. Toshihiro Okubo & Vincent Rebeyrol, 2006. "Home Market Effect and Regulation Costs - Homogeneous Firm and Heterogeneous Firm Trade Models," IHEID Working Papers 02-2006, Economics Section, The Graduate Institute of International Studies.
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  8. Andrew B. Bernard & Jonathan Eaton & J. Bradford Jenson & Samuel Kortum, 2000. "Plants and Productivity in International Trade," NBER Working Papers 7688, National Bureau of Economic Research, Inc.
  9. Philippe Martin & Thierry Mayer & Florian Mayneris, 2011. "Public support to clusters. A firm level study of french 'local productive systems'," Sciences Po publications info:hdl:2441/c8dmi8nm4pd, Sciences Po.
  10. Mohl, P. & Hagen, T., 2010. "Do EU structural funds promote regional growth? New evidence from various panel data approaches," Regional Science and Urban Economics, Elsevier, vol. 40(5), pages 353-365, September.
  11. Martin, Philippe & Rogers, Carol Ann, 1995. "Industrial location and public infrastructure," Journal of International Economics, Elsevier, vol. 39(3-4), pages 335-351, November.
  12. Karen Helene Midelfart-Knarvik & Henry G. Overman, 2002. "Delocation and European integration: is structural spending justified?," Economic Policy, CEPR;CES;MSH, vol. 17(35), pages 321-359, October.
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  15. Andrew B. Bernard & J. Bradford Jensen, 2001. "Why Some Firms Export," NBER Working Papers 8349, National Bureau of Economic Research, Inc.
  16. Richard E. Baldwin & Toshihiro Okubo, 2006. "Heterogeneous firms, agglomeration and economic geography: spatial selection and sorting," Journal of Economic Geography, Oxford University Press, vol. 6(3), pages 323-346, June.
  17. Marc J. Melitz & Gianmarco I.P. Ottaviano, 2005. "Market Size, Trade, and Productivity," NBER Working Papers 11393, National Bureau of Economic Research, Inc.
  18. Okubo, Toshihiro, 2009. "Trade liberalisation and agglomeration with firm heterogeneity: Forward and backward linkages," Regional Science and Urban Economics, Elsevier, vol. 39(5), pages 530-541, September.
  19. Vincent Dupont & Philippe Martin, 2006. "Subsidies to poor regions and inequalities: some unpleasant arithmetic," Journal of Economic Geography, Oxford University Press, vol. 6(2), pages 223-240, April.
  20. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2003. "Export versus FDI," NBER Working Papers 9439, National Bureau of Economic Research, Inc.
  21. Fumagalli, Chiara, 2003. "On the welfare effects of competition for foreign direct investments," European Economic Review, Elsevier, vol. 47(6), pages 963-983, December.
  22. Toshihiro Okubo & Eiichi Tomiura, 2010. "Industrial relocation policy and heterogeneous plants sorted by productivity: Evidence from Japan," Discussion Paper Series DP2010-35, Research Institute for Economics & Business Administration, Kobe University.
  23. Jonathan Eaton & Samuel Kortum & Francis Kramarz, 2004. "Dissecting trade: firms, industries, and export destinations," Staff Report 332, Federal Reserve Bank of Minneapolis.
  24. Baldwin, Richard & Okubo, Toshihiro, 2006. "Agglomeration, Offshoring and Heterogenous Firms," CEPR Discussion Papers 5663, C.E.P.R. Discussion Papers.
  25. Torsten Persson & Guido Tabellini, 2002. "Political Economics: Explaining Economic Policy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661314, March.
  26. Vincent Dupont & Philippe Martin, 2006. "Subsidies to Poor Regions and Inequalities: Some Unpleasant Arithmetic," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00176909, HAL.
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