Premium
Technologie, agglomération et concurrence régionale pour l'investissement.
Author(s) -
Blonigen Bruce A.,
Kolpin Van
Publication year - 2007
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/j.1365-2966.2007.00446.x
Subject(s) - inefficiency , economies of agglomeration , competition (biology) , investment (military) , economics , externality , production (economics) , industrial organization , economic geography , microeconomics , ecology , politics , political science , law , biology
. Competition for firms by region has a long‐standing history, and the academic literature has debated whether such competition is efficient. We develop a model that explores technology development by firms facing regional competition for their investment and examine the endogenous determination of region policy, firm technology, and agglomeration externalities. We find a new source of inefficiency – regional competition leads firms to inefficiently distort their development and selection of production technology to improve their standing in the regional competition for their investment. We show that these inefficient firm decisions on technology and location can also weaken agglomeration externalities.