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Anti-agglomeration Subsidies with Heterogeneous Firms

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Abstract

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.

Suggested Citation

  • Toshihiro Okubo, 2006. "Anti-agglomeration Subsidies with Heterogeneous Firms," IHEID Working Papers 16-2006, Economics Section, The Graduate Institute of International Studies.
    • Handle: RePEc:gii:giihei:heiwp16-2006
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    1. repec:nbp:nbpbik:v:47:y:2016:i:6:p:463-494 is not listed on IDEAS
    2. Okubo, Toshihiro & Tomiura, Eiichi, 2012. "Industrial relocation policy, productivity and heterogeneous plants: Evidence from Japan," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 230-239.
    3. repec:hal:pseose:hal-00975554 is not listed on IDEAS
    4. Hisamitsu Saito, 2015. "Firm Heterogeneity, Multiplant Choice, And Agglomeration," Journal of Regional Science, Wiley Blackwell, vol. 55(4), pages 540-559, September.
    5. Jonathan Eberle & Thomas Brenner, 2016. "More bucks, more growth, more justice? The effects of regional structural funds on regional economic growth and convergence in Germany," Working Papers on Innovation and Space 2016-01, Philipps University Marburg, Department of Geography.

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    More about this item

    Keywords

    : heterogeneous firms; economic geography; relocation subsidy; core-periphery structure; global/local tax-financing scheme.;
    All these keywords.

    JEL classification:

    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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