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http://hdl.handle.net/10419/19411
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| Title: | | Will there be a concentration of alikes? The impact of labor market structure on industry mix in the presence of product market shocks  |
| Authors: | | Stahl, Konrad O. Walz, Uwe |
| Issue Date: | | 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 |
| Appears in Collections: | | HWWA Discussion Paper, Hamburgisches Welt-Wirtschafts-Archiv
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