Non-linear externalities in firm localization

Giulio Bottazzi, Ugo Gragnolati () and Fabio Vanni

LEM Papers Series from Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy

Abstract: This paper presents a model of firm localization allowing for non-linear, quadratic externalities. The model and its numerical estimation procedure manage to disentangle localization externalities from the intrinsic advantages of regions. Moreover, the introduction of a quadratic term can accommodate both more-than-linear positive feedbacks as well as congestion effects. Indeed, if the quadratic term is sufficiently negative, one location can reach the point in which the addition of an extra firm decreases the probability for that same location to further attract other firms. In this sense, the present model does not assume a priori that the localization choices of firms are characterized by positive interdependencies. Rather, the methodology allows to estimate whether or not this is actually the case.

Keywords: Firm localization; Externalities; Non-linearities (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-cbe, nep-hme and nep-neu
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.lem.sssup.it/WPLem/files/2015-28.pdf (application/pdf)

Related works:
Journal Article: Non-linear externalities in firm localization (2017)
Working Paper: Non-linear externalities in firm localization (2017)
Working Paper: Non-linear externalities in firm localization (2017)
Working Paper: Non-linear externalities in firm localization (2015)
Working Paper: Non-linear externalities in firm localization (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ssa:lemwps:2015/28

Access Statistics for this paper

More papers in LEM Papers Series from Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy Contact information at EDIRC.
Bibliographic data for series maintained by ( this e-mail address is bad, please contact ).