Production location choice and risk aversion

Song-ken Hsu () and Lin-ti Tan ()
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Song-ken Hsu: Department of Industrial Economics, Tamkang University, Taipei 251, Taiwan
Lin-ti Tan: Institute of Economics, Academia Sinica, Taipei 115, Taiwan

The Annals of Regional Science, 2001, vol. 35, issue 2, 239-248

Abstract: This paper attempts to provide a general comparative static analysis on a firm's choice of production location with respect to variations in the degree of risk aversion under demand price, input price, and technology uncertainties. Our analysis shows that whether and how the plant location varies with a change in the firm's degree of risk aversion depend upon the nature of the production technology and how the input and location choice affect risk. It also demonstrates that some of our results are new, while some are generalizations of those obtained by Martinich and Hurter (1982).

JEL-codes: D20 D80 R30 (search for similar items in EconPapers)
Date: 2001-06-18
Note: Received: January 2000/Accepted: July 2000
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