Adjustment Costs and Long Run Spatial Agglomerations

We introduce knowledge spillovers as an externality in the production function of competitive Ãƒï¿½ïÂ¿Â½firms operating in a Ãƒï¿½ïÂ¿Â½nite spatial domain under adjustment costs. Spillovers are spatial as productive knowledge Ãƒï¿½ïÂ¿Â½flows more easily among firms located nearby. When knowledge spillovers are not internalized by Ãƒï¿½ïÂ¿Â½firms spatial agglomerations may emerge endogenously in a competitive equilibrium, however, they do not emerge at the steady state of the social optimum.

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Authors:	Brock, William ; Xepapadeas, Anastasios ; Yannacopoulos, Athanasios
Institutions:	Department of International and European Economic Studies, Athens University of Economics and Business (AUEB)
Subject:	Investment theory \| adjustment costs \| spatial agglomerations

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Extent:	application/pdf
Series:	DEOS Working Papers.
Type of publication:	Book / Working Paper
Notes:	Number 1327
Classification:	D21 - Firm Behavior ; R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location ; C61 - Optimization Techniques; Programming Models; Dynamic Analysis
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011140906