Partial ownership of local firms and zoning of neighboring towns

Juan Carlos Bárcena Ruiz and Francisco Javier Casado Izaga
Authors registered in the RePEc Author Service: F. Javier Casado-Izaga and Juan Carlos Bárcena-Ruiz

IKERLANAK from Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I

Abstract: This paper investigates zoning in two neighboring towns in which firms are owned by investors that reside in the two towns. We find that local regulators use zoning strategically depending on the weight of local profits in social welfare. When they are high enough both towns are zoned. For intermediate values an asymmetric result emerges: only one regulator resorts to zoning despite the symmetry in the percentage of ownership of the neighboring firms. For a low weight of local profits, towns may or may not be zoned. Zoning restrictions on the location of firms are tighter when local profits are more significant for social welfare.

Keywords: zoning; spatial; competition; foreign; ownership; location; choice (search for similar items in EconPapers)
Date: 2019-03-27
New Economics Papers: this item is included in nep-geo, nep-ind and nep-ure
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Journal Article: Partial ownership of local firms and zoning of neighboring towns (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ehu:ikerla:32820

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Dpto. de Fundamentos del Análisis Económico I, Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain

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