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The District and the Global Economy: Exportation Versus Foreign Location
Author(s) -
Basevi Giorgio,
Ottaviano Gianmarco I.P.
Publication year - 2002
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/1467-9787.00252
Subject(s) - exportation , harm , pace , profit (economics) , business , welfare , economics , industrial district , international trade , market economy , economy , microeconomics , geometry , mathematics , geodesy , political science , law , geography
We depict an industrial district as a center of innovation where positive local spillovers sustain the endogenous invention of new goods by profit‐seeking firms. After invention, firms face a crucial choice between reaching distant markets by export or plant delocation. Attempts by firms to circumvent trade barriers through delocation slow down the pace of innovation and harm the welfare of the district.