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| Author: | Devereaux, M. P. Griffith, R. Simpson, H. |
| Title: | Firm location decisions, regional grants and agglomeration externalities |
| Journal: | Journal of Public Economics
2007 : APR, VOL. 91:3-4, p. 413-435 |
| Index terms: | companies location problem regional policy |
| Language: | eng |
| Abstract: | This article explores whether discretionary governments grants influence where domestic and multinational firms locate new plants, and how the presence of agglomeration externalities interacts with these policy instruments. The results show that a region's existing industrial structure has an effect on the location of new entrants. It also showed that firms are less responsive to government subsidies in areas where there are fewer existing plants in their industry. Finally, this suggests that these subsidies are less effective in influencing firms' location decisions in the face of countervailing co-location benefits. |
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