Political participation, regional policy and the location of industry

Magnus Wiberg

Regional Science and Urban Economics, 2011, vol. 41, issue 5, 465-475

Abstract: This paper analyzes the location of manufacturing activities when regional policy is determined by each region's relative propensity to vote. The level of subsidies distributed to a region and the location of manufacturing activities are increasing in the region's relative political participation rate. The standard prediction in the economic geography literature, that the larger region becomes the core when trade barriers are reduced, no longer holds. The establishment of manufacturing production in the economically smaller region is increasing in the level of regional integration. As trade is increasingly liberalized, the economy features a reversed core-periphery equilibrium. Empirical evidence shows that the model is consistent with qualitative features of the data, and the results are robust to an instrumental variable strategy that accounts for the potential endogeneity of voter turnout.

Keywords: Economic; geography; Regional; policy; Voter; turnout (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0166046211000330
Full text for ScienceDirect subscribers only

Related works:
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:eee:regeco:v:41:y:2011:i:5:p:465-475

Access Statistics for this article

Regional Science and Urban Economics is currently edited by D.P McMillen and Y. Zenou

More articles in Regional Science and Urban Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().