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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/18796
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| Title: | | Knowledge-capital meets new economic geography  |
| Authors: | | Egger, Peter Gruber, Stefan Larch, Mario Pfaffermayr, Michael |
| Issue Date: | | 2005 |
| Series/Report no.: | | CESifo working papers 1432 |
| Abstract: | | We incorporate the now standard knowledge-capital model of multinational firms in a new economic geography setting. The theoretical predictions of our model suggest that unskilled labor mobility leads to less concentration of production than skilled labor mobility does. This is in line with empirical evidence that agglomeration of production among European nations is less pronounced than among US regions. Our model shows that the different patterns in labor mobility can explain actual differences in the spreading of industries. According to our welfare analysis, trade liberalization is likely Pareto-improving for a larger (smaller) country with mobile unskilled (skilled) labor. In the supplement, we investigate the sensitivity of our results in several respects. |
| Subjects: | | knowledge-capital model new economic geography unskilled labor mobility skilled labor mobility |
| JEL: | | F23 F12 R13 R12 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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