Industrial clusters : equilibrium, welfare, and policy
Working paper
Permanent lenke
http://hdl.handle.net/11250/162922Utgivelsesdato
2001-08Metadata
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- Discussion papers (SAM) [658]
Sammendrag
This paper studies the size and number of industrial clusters that will
arise in a multi-country world in which one sector has a propensity to cluster
because of increasing returns to scale. It compares the equilibrium with the
world welfare maximum, showing that the equilibrium will generally have
clusters that are too small, while there are possibly too many countries with a
cluster. Allowing national governments to subsidize will move the equilibrium
to the world welfare maximum, so there is no ‘race to the bottom’. If subsidy
rates were capped then there would be a proliferation of too many and too small clusters.
Utgiver
Norwegian School of Economics and Business Administration. Department of EconomicsSerie
Discussion paper2001:26