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Barriers to Diversification and Regional Allocation of Capital

Author

Listed:
  • Broll, Udo
  • Roldán-Ponce, Antonio
  • Wahl, Jack E.

Abstract

In order to evaluate the allocational effectiveness of regional policy when harmonizing regional economic conditions firms? preferences play a pivot role. If harmonization hinders risk diversification of the firm, then instead of regional diversification of capital agglomeration of capital occurs. Hence, regional policy will not achieve its objective to equal the spatial allocation of capital.

Suggested Citation

  • Broll, Udo & Roldán-Ponce, Antonio & Wahl, Jack E., 2007. "Barriers to Diversification and Regional Allocation of Capital," Dresden Discussion Paper Series in Economics 14/07, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
    • Handle: RePEc:zbw:tuddps:1407
    as

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    References listed on IDEAS

    as
    1. José Pedro Pontes & John B. Parr, 2005. "A note on agglomeration and the location of multinational firms," Papers in Regional Science, Wiley Blackwell, vol. 84(3), pages 509-518, August.
    2. José Pedro Pontes, 2005. "Intermediate goods and the location of productive activity," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 39(1), pages 11-24, March.
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    4. Pflüger, Michael & Südekum, Jens, 2008. "Integration, agglomeration and welfare," Journal of Urban Economics, Elsevier, vol. 63(2), pages 544-566, March.
    5. Broll, Udo & Wahl, Jack E. & Wong, Wing-Keung, 2006. "Elasticity of risk aversion and international trade," Economics Letters, Elsevier, vol. 92(1), pages 126-130, July.
    6. Friend, Irwin & Blume, Marshall E, 1975. "The Demand for Risky Assets," American Economic Review, American Economic Association, vol. 65(5), pages 900-922, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Regional policy; agglomeration; diversification; allocation; risk aversion; prudence;
    All these keywords.

    JEL classification:

    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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