Resource title

Footloose capital, market access, and the geography of regional state aid

Resource image

image for OpenScout resource :: Footloose capital, market access, and the geography of regional state aid

Resource description

The global welfare implications of home market effects in trade models with imperfect competition are little understood. This paper proposes a simple model in which such implications can be easily analyzed. It shows an overall tendency of imperfectly competitive sectors to inefficiently cluster in locations that offer market access advantages. The more so the stronger the market power of firms as well as the intensity of increasing returns to scale and the lower the trade costs. As such features are likely to differ widely across sectors, those results provide theoretical ground to the promotion of regional policies that are also sectorspecific and not only region-specific as currently in the EU.

Resource author

Gianmarco I. P. Ottaviano

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/19419

Resource license

Adapt according to the presented license agreement and reference the original author.