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The trade-off between agglomeration force: Evidence from firm-level location data 1974-1998
KTH, Skolan för industriell teknik och management (ITM), Centra, Centrum för studier inom vetenskap och innovation, CESIS. KTH, Skolan för industriell teknik och management (ITM), Industriell ekonomi och organisation (Inst.), Samhällsekonomi.ORCID-id: 0000-0003-0218-7924
KTH, Skolan för industriell teknik och management (ITM), Centra, Centrum för studier inom vetenskap och innovation, CESIS. KTH, Skolan för industriell teknik och management (ITM), Industriell ekonomi och organisation (Inst.), Samhällsekonomi.ORCID-id: 0000-0001-8377-1633
2005 (engelsk)Rapport (Annet vitenskapelig)
Abstract [en]

The theoretical prediction of a trade-off between production costs and agglomeration economiesadvanced in recent “new economic” geography models has – despite its important policyimplications – not been exposed to empirical testing. Based on a standard model where labormobility is assumed to differ between two regions - the “European Union” (EU) and the “world”- the empirical analysis shows that a ten percent increase in relative wages decreases entry byMNCs by approximately nine percent in EU, but only by three percent in the “world.” Or, putdifferently, a ten percent increase in relative wages in EU requires an increase by 26 percent inagglomeration to keep production levels unaltered. To our knowledge, this is the first attempt toempirically estimate this trade-off.

sted, utgiver, år, opplag, sider
CESIS, KTH Royal Institute of Technology , 2005. , s. 50
Serie
CESIS Working Paper Series in Economics and Institutions of Innovation ; 30
Emneord [en]
FDI, agglomeration, relative costs
HSV kategori
Identifikatorer
URN: urn:nbn:se:kth:diva-72360OAI: oai:DiVA.org:kth-72360DiVA, id: diva2:487521
Merknad
QC 20120208Tilgjengelig fra: 2012-02-08 Laget: 2012-01-31 Sist oppdatert: 2012-02-08bibliografisk kontrollert

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