An evolutionary model of firms location with technological externalities

Arbeitspapier

In an economic geography model where both a negative pecuniary and a positive technological externality are present, we introduce an explicit dynamics of firms locational choice and we characterize its long run distribution. Our analysis shows that economic activities evenly distribute when the pecuniary externalities prevail, and agglomerate otherwise. Due to the stochastic nature of the dynamics, even when agglomeration occurs, it is only a metastable state. By giving time and firms heterogeneity a role, we are bringing the evolutionary approach inside the domain of economic geography.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: LEM Working Paper Series ; No. 2008/27

Classification and Topics

• Classification: Wirtschaft ; Existence and Stability Conditions of Equilibrium ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Size and Spatial Distributions of Regional Economic Activity
• Subject: Evolutionary Economic Geography ; Heterogeneity ; Agglomeration ; Technological externalities ; Markov Chains

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bottazzi, Giulio ; Dindo, Pietro
• Event: Veröffentlichung
• (who): Scuola Superiore Sant'Anna, Laboratory of Economics and Management (LEM)
• (where): Pisa
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/89483
• Last update: 10.03.2025, 11:44 AM CET