Adjustment Costs and Long Run Spatial Agglomerations

William Brock, Anastasios Xepapadeas and Athanasios Yannacopoulos

No 1327, DEOS Working Papers from Athens University of Economics and Business

Abstract: We introduce knowledge spillovers as an externality in the production function of competitive ��firms operating in a ��nite 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: Investment theory; adjustment costs; spatial agglomerations (search for similar items in EconPapers)
JEL-codes: C61 D21 R3 (search for similar items in EconPapers)
Date: 2013
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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:aue:wpaper:1327

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