Localized technological externalities and the geographical distribution of firms

Giulio Bottazzi () and Pietro Dindo ()

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

Abstract: This letter investigates the role of technological externalities on the geographical distribution of firms. In an analytically solvable model, we show how the location of economic activities is affected by the trade-off between pecuniary externalities, as dependent on transportation costs, and localized technological externalities, as dependent on inter-regional spillovers.

New Economics Papers: this item is included in nep-geo, nep-net and nep-ure
Date: Written 2008-04-24
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