Does History Matter Only When It Matters Little? The Case of City-Industry Location

James Rauch

The Quarterly Journal of Economics, 1993, vol. 108, issue 3, 843-867

Abstract: When will an industry subject to agglomeration economies move from an old, high-cost site to a new, low-cost site? It is argued that history, in the form of sunk costs resulting from the operation of many firms at a site, creates a first-mover disadvantage that can prevent relocation. It is demonstrated that developers of industrial parks can partly overcome this inertia through discriminatory pricing of land over time, and empirical evidence is provided that they actually engage in such behavior. It is also shown that other aspects of developer land-sale strategy can be a source of information on the nature of interfirm externalities.

Date: 1993
References: Add references at CitEc
Citations: View citations in EconPapers (125)

Downloads: (external link)
http://hdl.handle.net/10.2307/2118410 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Does History Matter Only When it Matters Little? The Case of City-Indu try Location (1993)
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:qjecon:v:108:y:1993:i:3:p:843-867.

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

Access Statistics for this article

The Quarterly Journal of Economics is currently edited by Robert J. Barro, Lawrence F. Katz, Nathan Nunn, Andrei Shleifer and Stefanie Stantcheva

More articles in The Quarterly Journal of Economics from President and Fellows of Harvard College
Bibliographic data for series maintained by Oxford University Press ().