Subsidies to poor regions and inequalities: some unpleasant arithmetic

Vincent Dupont and Philippe Martin

Journal of Economic Geography, 2006, vol. 6, issue 2, 223-240

Abstract: This paper analyzes the effect of different regional subsidies to poor regions on industrial location, employment, income inequality and welfare in the presence of agglomeration forces when firms are mobile. The impact on location of such subsidies is stronger when trade costs are low. With mobile capital, regional subsidies such as tax breaks in the poor region lead to higher profits for firms in both regions. If financed at the national level, such subsidies given to firms in the poor region increase inequality between and within regions. Finally, with relocation costs, such regional subsidies may hurt the poor region. Copyright 2006, Oxford University Press.

Date: 2006
References: Add references at CitEc
Citations: View citations in EconPapers (52)

Downloads: (external link)
http://hdl.handle.net/10.1093/jeg/lbi019 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Subsidies to Poor Regions and Inequalities: Some Unpleasant Arithmetic (2006)
Working Paper: Subsidies to poor regions and inequalities: some unpleasant arithmetic (2006)
Working Paper: Subsidies to Poor Regions and Inequalities: Some Unpleasant Arithmetic (2006)
Working Paper: Subsidies to Poor Regions and Inequalities: Some Unpleasant Arithmetic (2003)
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:oup:jecgeo:v:6:y:2006:i:2:p:223-240

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

Journal of Economic Geography is currently edited by Jorge De la Roca, Stephen Gibbons, Simona Iammarino, Amanda Ross and James Faulconbridge

More articles in Journal of Economic Geography from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ().