IDEAS home Printed from https://ideas.repec.org/p/hub/wpecon/200911.html
   My bibliography  Save this paper

Real Estate Markets and the Location of Economic Activity

Author

Listed:
  • De Bruyne, Karolien

    () (Hogeschool-Universiteit Brussel (HUB), Belgium
    Katholieke Universiteit Leuven, Belgium)

Abstract

In determining the location of their economic activity, firms take many factors into account. According to neo-classical theories, natural advantages are the most important determinants of location. According to new economic geography theories (Fujita, Krugman and Venables (1999)), market access and low-cost access to intermediate goods matter most for location. The availability and affordability of industrial terrains is another key factor for firms that want to set up their production. It is obvious that this key factor combines both existing strands of literature. Regions with abundant land will have lower land prices, therefore attracting more firms. However, often these regions will be less favourably located as far as the access to the markets for final and intermediate goods is concerned. Firms will therefore have to trade off terrain costs against transportation costs. For governments willing to attract firms it is highly important to know what drives their location decisions. The purpose of this paper is to get a better insight in the link between the real estate market and the location decision of firms. In doing this we focus on the Flemish market. If a government wants to attract firms to its country it is clear that it will have to compete as far as the availability of attractive industrial terrains is concerned. The central question we address in this paper is whether a government should opt for a region-specific policy investing in a region as a whole - rather than for a sector-specific policy directed towards a sector irrespective of the region it invests in. Using investment data of different manufacturing sectors we provide a first answer to this problem.

Suggested Citation

  • De Bruyne, Karolien, 2009. "Real Estate Markets and the Location of Economic Activity," Working Papers 2009/11, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
  • Handle: RePEc:hub:wpecon:200911
    as

    Download full text from publisher

    File URL: https://lirias.hubrussel.be/bitstream/123456789/2480/1/09HRP11.pdf
    Download Restriction: no

    More about this item

    Keywords

    industrial terrains; location;

    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:hub:wpecon:200911. 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: (Sabine Janssens). General contact details of provider: http://edirc.repec.org/data/emhubbe.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.