Market potential and the location of Japanese investment in the European Union

• 成果类型: Article
• 署名作者: Head, K; Mayer, T
• 署名单位: University of British Columbia; Centre for Economic Policy Research - UK
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/0034653043125257
• 发表日期: 2004-11
• 页码: 959-972
• 关键词: economic-geography; TRADE

摘要

This paper develops a theoretical model of location choice under imperfect competition to formalize the notion that firms prefer to locate where the markets are. The profitability of a location depends on a term that weights demand in all locations by accessibility. Using a sample of Japanese firms' choices of regions within European countries, we compare the theoretically derived measure of market potential with the standard form used by geographers. Our results show that market potential matters for location choice but cannot account entirely for the tendency of firms on the same industry to agglomerate.