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 -