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Adjustment Costs and Long Run Spatial Agglomerations

William Brock, Anastasios Xepapadeas () and Athanasios Yannacopoulos

No 1327, DEOS Working Papers from Athens University of Economics and Business

Abstract: We introduce knowledge spillovers as an externality in the production function of competitive ��firms operating in a ��nite spatial domain under adjustment costs. Spillovers are spatial as productive knowledge ��flows more easily among firms located nearby. When knowledge spillovers are not internalized by ��firms spatial agglomerations may emerge endogenously in a competitive equilibrium, however, they do not emerge at the steady state of the social optimum.

Keywords: Investment theory; adjustment costs; spatial agglomerations (search for similar items in EconPapers)
JEL-codes: D21 R3 C61 (search for similar items in EconPapers)
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Working Paper: Adjustment Costs and Long Run Spatial Agglomerations (2013) Downloads
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