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Firm location decisions, regional grants and agglomeration externalities

Abstract:

We examine whether discretionary government grants influence where domestic and multinational firms locate new plants, and how the presence of agglomeration externalities interacts with these policy instruments. We find that a region's existing industrial structure has an effect on the location of new entrants. Grants do have a small effect in attracting plants to specific geographic areas, but importantly, we find that firms are less responsive to government subsidies in areas where there ar...

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Publication date:
2007-01-01
URN:
uuid:086df451-f60d-404e-891b-cfd0253c5e43
Local pid:
oai:eureka.sbs.ox.ac.uk:1275

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