To answer whether capital mobility exacerbates or dampens the agglomerative tendency of footloose entrepreneurs, this paper incorporates a footloose-capital with a footloose-entrepreneur manufacturing industry based on a tractable analytical structure with two identical regions. The model shows...

To examine the effects of heterogeneous labor mobility on the distribution of industries and analyze the subsidy policy for attracting firms, this paper develops an analytically solvable new economic geography model, which incorporates heterogeneous locational preferences and an intra-industry...

The home market effect (HME) reveals how industrial location depends on country size. One-factor or immobile-labor models are employed in early studies of the HME, in which the transport costs of the homogeneous good are found to be essential. In more recent literature, two-factor models, with...