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Non-linear externalities in firm localization
- Source :
- Regional Studies, Regional Studies, Taylor & Francis (Routledge), 2017, 51 (8), pp.1138-1150. ⟨10.1080/00343404.2016.1237770⟩
- Publication Year :
- 2015
- Publisher :
- HAL CCSD, 2015.
-
Abstract
- ISSN(ONLINE) 2284-0400; This paper presents a model of firm localization allowing for non-linear, quadratic externalities. The model disentangles localization externalities from the intrinsic advantages of regions, while the inferential analysis on its parameters verifies whether externalities may have a non-linear shape. Specifically, the introduction of a quadratic term can accommodate both more-than-linear positive feedbacks as well as congestion effects. If the quadratic term is sufficiently negative, one location can reach the point in which the addition of an extra firm decreases the probability for that same location to further attract other firms. In this sense, the present model does not assume a priori that the localization choices of firms are characterized by positive interdependencies. Rather, the methodology allows to estimate whether or not this is actually the case. Our main result is that the quadratic term is virtually never found to be statistically different from zero across Italian sectors observed at the scale of commuting zones, so that localized externalities seem to be well approximated by a linear specification.
- Subjects :
- Mathematical optimization
JEL: C - Mathematical and Quantitative Methods/C.C5 - Econometric Modeling/C.C5.C51 - Model Construction and Estimation
LEM Working Paper Series 2015/28
0211 other engineering and technologies
Scale (descriptive set theory)
02 engineering and technology
Quadratic equation
firm localization, externalities, non-linearities
0502 economics and business
Econometrics
JEL: R - Urban, Rural, Regional, Real Estate, and Transportation Economics/R.R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location/R.R3.R30 - General
050207 economics
General Environmental Science
Mathematics
05 social sciences
Firm localization
JEL: C - Mathematical and Quantitative Methods/C.C1 - Econometric and Statistical Methods and Methodology: General/C.C1.C12 - Hypothesis Testing: General
General Social Sciences
021107 urban & regional planning
Non-linearities
[SHS.ECO]Humanities and Social Sciences/Economics and Finance
Term (time)
Zero (linguistics)
Nonlinear system
Externalities
A priori and a posteriori
Externality
Sign (mathematics)
Subjects
Details
- Language :
- English
- ISSN :
- 22840400, 00343404, and 13600591
- Database :
- OpenAIRE
- Journal :
- Regional Studies, Regional Studies, Taylor & Francis (Routledge), 2017, 51 (8), pp.1138-1150. ⟨10.1080/00343404.2016.1237770⟩
- Accession number :
- edsair.doi.dedup.....312853b6b9b53fd851172bf43565ed13