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Industrial location and public infrastructure

Author

Listed:
  • Carol Ann Rogers

    (GU - Georgetown University [Washington])

  • Philippe Martin

    (CEPR - Center for Economic Policy Research)

Abstract

This paper examines the impact of public infrastructure on industrial location when increasing returns are present. Trade integration implies that firms tend to locate in countries with better domestic infrastructure. High levels of international infrastructure and strong returns to scale magnify industrial relocation due to differentials in domestic infrastructure or capital endowments. Regional policies which finance domestic infrastructure in a poor country lead firms to relocate in this country. Regional policies which finance international infrastructure in a poor country will lead firms to leave this country. We also analyze the incentives for countries to inhibit industrial relocation.

Suggested Citation

  • Carol Ann Rogers & Philippe Martin, 1995. "Industrial location and public infrastructure," Post-Print hal-03609294, HAL.
    • Handle: RePEc:hal:journl:hal-03609294
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    Keywords

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    JEL classification:

    • F1 - International Economics - - Trade
    • H4 - Public Economics - - Publicly Provided Goods
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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