Adjustment Costs and Long Run Spatial Agglomerations

William A. Brock, Anastasios Xepapadeas and Athanasios Yannacopoulos

No 156577, Economy and Society from Fondazione Eni Enrico Mattei (FEEM)

Abstract: We introduce knowledge spillovers as an externality in the production function of competitive firms operating in a finite spatial domain under adjustment costs. Spillovers are spatial as productive knowledge flows more easily among firms located nearby. When knowledge spillovers are not internalized by firms spatial agglomerations may emerge endogenously in a competitive equilibrium, however, they do not emerge at the steady state of the social optimum.

Keywords: Production; Economics (search for similar items in EconPapers)
Pages: 17
Date: 2013-07
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https://ageconsearch.umn.edu/record/156577/files/NDL2013-068.pdf (application/pdf)

Related works:
Working Paper: Adjustment Costs and Long Run Spatial Agglomerations (2013)
Working Paper: Adjustment Costs and Long Run Spatial Agglomerations (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:feemso:156577

DOI: 10.22004/ag.econ.156577

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