Strategic investment and industry location in a footloose capital model of economic geography

Kenji Fujiwara

Economics Letters, 2021, vol. 203, issue C

Abstract: This paper examines how strategic investment of capitalists affects the industry location in a footloose capital model. We show that the home market effect is robust but is moderated when capitalists strategically invest. That is, the industry location is closer to dispersion when capitalists are strategic than when they are atomic.

Keywords: Footloose capital model; Strategic investment; Industry location (search for similar items in EconPapers)
JEL-codes: F12 R12 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:203:y:2021:i:c:s0165176521001208

DOI: 10.1016/j.econlet.2021.109843

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