Economic Development and Agglomeration: Research Activity and Tax Competition in a Static Equilibrium Model

Kurt Hafner

DEGIT Conference Papers from DEGIT, Dynamics, Economic Growth, and International Trade

Abstract: The paper outlines a static equilibrium model, which analyses the economic development in a two-country case by considering international migration in R&D-sectors. The effects of migration and firm decisions on both industrial agglomeration and economic development will be shown: lock-in-effects and free market entry will lead to a concentration of firms. In addition, the consideration of fundamental and secondary research activity leads to a higher number of firms and products by means of cost reduction and spillover effects. The resulting demand of unskilled and skilled labor will be met by sectoral and international migration. This reinforces the concentration of economic activity and yields to a higher degree of specialization and economic development. Furthermore, strategic income taxation enables governments to foster industrial agglomeration and to promote national research activity. Hence, countries face international tax competition while competing for skilled labor.

Keywords: Economic Geography; Agglomeration; International Migration; Regional Growth Theory; Spillover-Effect; Tax Competition. (search for similar items in EconPapers)
JEL-codes: C7 F22 O1 R1 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2004-06
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://degit.sam.sdu.dk/papers/degit_09/C009_023.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to degit.sam.sdu.dk:80 (No such host is known. )

Related works:
Journal Article: Trade Liberalization and Technology Diffusion (2011)
Working Paper: Industrial Agglomeration and Economic Development (2004)
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:deg:conpap:c009_023

Access Statistics for this paper

More papers in DEGIT Conference Papers from DEGIT, Dynamics, Economic Growth, and International Trade Contact information at EDIRC.
Bibliographic data for series maintained by Jan Pedersen ().