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Industrial location and public infrastructure

Author

Listed:
  • Carol Ann Rogers

    (GU - Georgetown University [Washington])

  • Philippe Martin

    (CEPR - Center for Economic Policy Research)

Abstract

This paper examines the impact of public infrastructure on industrial location when increasing returns are present. Trade integration implies that firms tend to locate in countries with better domestic infrastructure. High levels of international infrastructure and strong returns to scale magnify industrial relocation due to differentials in domestic infrastructure or capital endowments. Regional policies which finance domestic infrastructure in a poor country lead firms to relocate in this country. Regional policies which finance international infrastructure in a poor country will lead firms to leave this country. We also analyze the incentives for countries to inhibit industrial relocation.

Suggested Citation

  • Carol Ann Rogers & Philippe Martin, 1995. "Industrial location and public infrastructure," Post-Print hal-03609294, HAL.
    • Handle: RePEc:hal:journl:hal-03609294
    as

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    References listed on IDEAS

    as
    1. Vickerman, R W, 1989. "Measuring Changes in Regional Competitiveness: The Effects of International Infrastructure Investments," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 23(4), pages 275-286.
    2. Bertola, Giuseppe, 1992. "Models of Economic Integration and Localized Growth," CEPR Discussion Papers 651, C.E.P.R. Discussion Papers.
    3. Krugman, Paul R, 1993. "On the Relationship between Trade Theory and Location Theory," Review of International Economics, Wiley Blackwell, vol. 1(2), pages 110-122, June.
    4. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
    5. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    6. Martin, Philippe & Rogers, Carol Ann, 1994. "Trade Effects of Regional Aid," CEPR Discussion Papers 910, C.E.P.R. Discussion Papers.
    7. Wheeler, David & Mody, Ashoka, 1992. "International investment location decisions : The case of U.S. firms," Journal of International Economics, Elsevier, vol. 33(1-2), pages 57-76, August.
    8. Krugman, Paul & Venables, Anthony J, 1990. "Integration and the Competitiveness of Peripheral Industry," CEPR Discussion Papers 363, C.E.P.R. Discussion Papers.
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    More about this item

    Keywords

    Public infrastructure; Industrial location; Trade integration; Regional Policies;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • H4 - Public Economics - - Publicly Provided Goods
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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