Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/19411
Authors: 
Stahl, Konrad O.
Walz, Uwe
Year of Publication: 
2001
Series/Report no.: 
HWWA Discussion Paper 140
Abstract: 
We analyze determinants of regional industry mix and focus especially on the influence of labor market characteristics. By combining a labor market pooling argument with an argument involving the cost of switching a worker from one firm to another, we show that in the presence of product market shocks there exists an interesting trade-off for the concentration of firms of the same industry in one region. Firms belonging to different industries are hedged against industry-specific shocks if they settle in the same region, but face higher switching costs (retraining costs for workers moving from one firm to another). In addition, with a given supply of labor there is an additional rationing effect affecting the location decisions of firms. Against the background of these trade-offs we analyze the resulting location decisions of firms in a two-regions-two-industry-four-firm framework. We analyze the impact of different parameters on the location choice of firms.
Subjects: 
local labor market
product market shocks
industry structure
imperfect competition
JEL: 
L1
J4
R3
Document Type: 
Working Paper

Files in This Item:
File
Size
293.06 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.