Public Input Competition and Agglomeration

Journal article

Publication Details

Author(s): Fenge R, von Ehrlich M, Wrede M
Journal: Regional Science and Urban Economics
Publisher: Elsevier
Publication year: 2009
Volume: 39
Pages range: 621 – 631
ISSN: 0166-0462
Language: English


This paper analyzes the impact of public input competition in a New Economic Geography framework. It is shown that regional competition yields an overprovision of public inputs if trade costs are sizable while it leads to underprovision if regions are highly integrated. Moreover, public input competition assures a dispersion of industry as long as trade costs are high but induces agglomeration even for ex ante identical regions if trade costs have fallen below a certain value. Finally, a trade-off between regional convergence and efficiency arises since the efficient distribution of regional infrastructure requires full agglomeration for sufficiently low trade costs. © 2009 Elsevier B.V. All rights reserved.

FAU Authors / FAU Editors

Wrede, Matthias Prof. Dr.
Lehrstuhl für Volkswirtschaftslehre, insbesondere Sozialpolitik

How to cite

Fenge, R., von Ehrlich, M., & Wrede, M. (2009). Public Input Competition and Agglomeration. Regional Science and Urban Economics, 39, 621 – 631.

Fenge, Robert, Maximilian von Ehrlich, and Matthias Wrede. "Public Input Competition and Agglomeration." Regional Science and Urban Economics 39 (2009): 621 – 631.


Last updated on 2018-14-07 at 14:23