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OPTIMAL ALLOCATION OF INVESTMENT AND REGIONAL DISPARITIES

Stilianos Alexiadis and Christos Ladias ()

Regional Science Inquiry, 2011, vol. III, issue 2, 45-59

Abstract: A model of optimal allocation of investment across regions is developed. It is shown that the optimality conditions may lead to increasing inequalities at the spatial level. Introducing an element of endogenous innovation dualistic situation emerges. An empirical analysis, using data for the NUTS-2 regions of the European Union seems to confirm this argument.

Keywords: Regional Allocation of Investment; Regional Inequalities; Regional Policy (search for similar items in EconPapers)
JEL-codes: C21 O18 R11 (search for similar items in EconPapers)
Date: 2011
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