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Regional Policy, Integration and the Location of Industry in a Multiregion Framework

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  • Forslid, Rikard

Abstract

This Paper analyses the interaction of economic integration and some typical regional policies in a new economic geography model with three regions of different size. The policies analysed are when the government controls the location of industry through location permits, infrastructure investments, and subsidies to the establishment of industry. It is shown how regional policy can easily be misdirected. The existing literature almost entirely focuses on two-region cases. This Paper instead analytically analyses a three-region case with asymmetric regions. The introduction of a third region gives several new insights. In particular the locational consequences for the region of intermediate size can generally not be inferred from a two-region case.

Suggested Citation

  • Forslid, Rikard, 2004. "Regional Policy, Integration and the Location of Industry in a Multiregion Framework," CEPR Discussion Papers 4630, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:4630
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    Citations

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    Cited by:

    1. Juan Labraga, 2009. "Política Comercial y Política de Infraestructura en el MERCOSUR," IDB Publications (Working Papers) 9328, Inter-American Development Bank.
    2. Bastian Heider & Martin T. W. Rosenfeld & Albrecht Kauffmann, 2018. "Does Administrative Status Matter for Urban Growth? Evidence from Present and Former County Capitals in East Germany," Growth and Change, Wiley Blackwell, vol. 49(1), pages 33-54, March.
    3. Cristobal, Adolfo, 2007. "Trade and migration: a U-shaped transition in Eastern Europe," MPRA Paper 3446, University Library of Munich, Germany.
    4. Jürgen Von Hagen, 2007. "Institutionelle Gestaltung föderaler Systeme: Theorie und Empirie," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(2), pages 109-109, March.
    5. Cornelius Bähr & Ulrike Stierle‐von Schütz & Matthias Wrede, 2007. "Dezentralisierung in den EU‐Staaten und räumliche Verteilung wirtschaftlicher Aktivitäten," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(2), pages 110-129, March.
    6. I-Ju Tsai, 2017. "A theoretical assessment on the trading arrangements for a small Asian economy with footloose entrepreneur movement toward China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 59(2), pages 393-417, September.

    More about this item

    Keywords

    Agglomeration; New economic geography; Multiregion-model; Regional policy;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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