TY  - JOUR
AU  - Blonigen, Bruce A
AU  - Kolpin, Van
TI  - Technology, Agglomeration, and Regional Competition for Investment
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8862
PY  - 2002
Y2  - March 2002
DO  - 10.3386/w8862
UR  - http://www.nber.org/papers/w8862
L1  - http://www.nber.org/papers/w8862.pdf
N1  - Author contact info:
Bruce Blonigen
Department of Economics
1285 University of Oregon
Eugene, OR 97403-1285
Tel: 541/346-4680
Fax: 541/346-1243
E-Mail: bruceb@uoregon.edu
AB  - The active 'courting' of firms by municipalities, regions, and even nations has a long-standing history and the competition for firm location through a wide variety of incentives seems to have escalated to new heights in recent years. We develop a model that explores technology development by firms that face regional competition for their investment and examine the endogenous determination of regions' policies, firm technology, and agglomeration externalities.  In particular, we find that regional competition leads firms to inefficiently distort their research and development efforts in hopes of improving their standing in the competition amongst regions for their investment. This loss in efficiency is aggravated by the agglomeration externalities that are inherently present in many industries.  We offer several case studies that provide evidence consistent with our theoretical conclusions.
ER  -