Growing Locations: Industry Location in a Model of Endogenous Growth

Philippe Martin and Gianmarco Ottaviano

No 1523, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper constructs a model of endogenous growth and endogenous industry location where the two interact. We show that with global spillovers in R&D, a high growth rate and a high level of transaction costs are associated with relocation of the newly created firms to the South (the location with a low initial human capital). With local spillovers in R&D, this activity will be agglomerated in the North and the rate of innovation will increase with the concentration of firms in the North. This in turn implies that a decrease of transaction costs through, for example, trade integration, will increase the growth rate because it leads to a higher industrial concentration of firms where the R&D is located. We show that industrial concentration improves welfare only for low enough transaction costs and high enough spillovers.

Keywords: Endogenous Growth; New Geography; R&D (search for similar items in EconPapers)
JEL-codes: F43 O30 R12 (search for similar items in EconPapers)
Date: 1996-11
References: Add references at CitEc
Citations: View citations in EconPapers (58)

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=1523 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Chapter: Growing locations: Industry location in a model of endogenous growth (2021)
Journal Article: Growing locations: Industry location in a model of endogenous growth (1999)
Working Paper: Growing Locations: Industry Location in a Model of Endogenous Growth (1999)
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:cpr:ceprdp:1523

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=1523

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().