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This paper focuses on two distint facets of globalization: the decrease in the trade costs of goods and the decline of communication costs between headquarters and production facilities within firms. When the unskilled have about the same wage in the two regions, the decrease of these costs...
Persistent link: https://www.econbiz.de/10005008176
We investigate an economic geography model in which agricultural goods are costly to transport and in which manufactures hire labor from the local agricultural sector as unskilled labor. We show that agricultural transport costs and local-unskilled labor requirements in firms act as a dispersion...
Persistent link: https://www.econbiz.de/10005008199
In a recent study, Holmes and Stevens (2002) identify for the first time a positive relationship that exists between establishment scale and local industry concentration using a large cross-sectional plant level data set for the US. Using an exhaustive plant level panel data set for Irish...
Persistent link: https://www.econbiz.de/10005008430
In this paper we build a quality-augmented version of an economic geography model where consumers have heterogenous tastes for a set of manufacturing varieties. We discuss a footloose capital model and a footloose entrepreneur model. We show that firms selling the goods with higher values select...
Persistent link: https://www.econbiz.de/10005008443
Revenue sharing can be used to discourage low tax regions from competing for capital and firms with high tax regions. However, with heterogeneous regions, revenue sharing involves net transfers across regions and creates a 'moral-hazard' problem that is, regions may want to invest less in market...
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