Adjustment Costs and Long Run Spatial Agglomerations

William Brock, Anastasios Xepapadeas and Athanasios Yannacopoulos
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Athanasios Yannacopoulos: Athens University of Economics and Business, Department of Statistics

No 2013.68, Working Papers from Fondazione Eni Enrico Mattei

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: Investment Theory; Adjustment Costs; Spatial Agglomerations (search for similar items in EconPapers)
JEL-codes: C61 D21 R3 (search for similar items in EconPapers)
Date: 2013-07
New Economics Papers: this item is included in nep-geo and nep-ure
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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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