Internalistation, Industrial Policy and Clusters
This paper analyses industrial policy in a high wage open economy hosting an agglomeration consisting of vertically linked upstream and downstream firms. Optimal policy towards upstream and downstream industries differ radically in this setting. However the restriction that the agglomeration should be sustained may restrict the otherwise welfare maximising policy.
|Date of creation:||17 Dec 2001|
|Date of revision:|
|Contact details of provider:|| Postal: Department of Economics, Stockholm, S-106 91 Stockholm, Sweden|
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