Technology, Agglomeration, and Regional Competition for Investment

Bruce Blonigen and Kolpin Van

No 8862, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The active 'courting' of firms by municipalities, regions, and even nations has a long-standing history and the competition for firm location through a wide variety of incentives seems to have escalated to new heights in recent years. We develop a model that explores technology development by firms that face regional competition for their investment and examine the endogenous determination of regions' policies, firm technology, and agglomeration externalities. In particular, we find that regional competition leads firms to inefficiently distort their research and development efforts in hopes of improving their standing in the competition amongst regions for their investment. This loss in efficiency is aggravated by the agglomeration externalities that are inherently present in many industries. We offer several case studies that provide evidence consistent with our theoretical conclusions.

JEL-codes: H71 L23 (search for similar items in EconPapers)
Date: 2002-03
New Economics Papers: this item is included in nep-ino and nep-pbe
Note: ITI
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Citations: View citations in EconPapers (1)

Published as Blonigen, Bruce A. and Van Kolpin. “Technology, Agglomeration, and Regional Competition for Investment.” Canadian Journal of Economics 40 (November 2007): 1149-1167.

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Related works:
Journal Article: Technology, agglomeration, and regional competition for investment (2007)
Working Paper: Technology, Agglomeration, and Regional Competition for Investment (2003)
Working Paper: Technology, Agglomeration, and Regional Competition for Investment (2001)
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