Public input competition and agglomeration

Fenge, Robert; von Ehrlich, Maximilian; Wrede, Matthias (2009). Public input competition and agglomeration. Regional science and urban economics, 39(5), pp. 621-631. Elsevier 10.1016/j.regsciurbeco.2009.04.003

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This paper analyzes the impact of public input competition in a New Economic Geography framework. It is shown that regional competition yields an overprovision of public inputs if trade costs are sizable while it leads to underprovision if regions are highly integrated. Moreover, public input competition assures a dispersion of industry as long as trade costs are high but induces agglomeration even for ex ante identical regions if trade costs have fallen below a certain value. Finally, a trade-off between regional convergence and efficiency arises since the efficient distribution of regional infrastructure requires full agglomeration for sufficiently low trade costs.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics
03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics > Economic Policy and Regional Economics
03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics
03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics > Public Economics
11 Centers of Competence > Center for Regional Economic Development (CRED)

UniBE Contributor:

von Ehrlich, Maximilian

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

0166-0462

Publisher:

Elsevier

Language:

English

Submitter:

Melanie Moser

Date Deposited:

26 Apr 2017 10:46

Last Modified:

26 Apr 2017 10:46

Publisher DOI:

10.1016/j.regsciurbeco.2009.04.003

Additional Information:

JEL classification; F12; F15; H87; R12

Uncontrolled Keywords:

Public input competition; infrastructure; agglomeration

BORIS DOI:

10.7892/boris.96267

URI:

https://boris.unibe.ch/id/eprint/96267

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