TY  - JOUR
AU  - Rauch,James E.
TI  - Does History Matter Only When it Matters Little?  The Case of City-Indu try Location
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4312
PY  - 1993
Y2  - April 1993
UR  - http://www.nber.org/papers/w4312
L1  - http://www.nber.org/papers/w4312.pdf
N1  - Author contact info:
James E. Rauch
Department of Economics
University of California, San Diego
La Jolla, CA 92093-0508
Tel: 858/534-2405
Fax: 858/534-7040
E-Mail: jrauch@weber.ucsd.edu
AB  - When will an industry subject to agglomeration economies move from an old, high-cost site to a new, low-cost site? It is argued that history, in the form of sunk costs resulting from the operation of many firms at a site, creates a first-mover disadvantage that can prevent relocation. It is demonstrated that developers of industrial parks can partly overcome this inertia through discriminatory pricing of land over time, and empirical evidence is provided that they actually engage in such behavior. It is also shown that other aspects of developer land-sale strategy can be a source of information on the nature of interfirm externalities.
ER  -