More on scale economies and cities

Article Abstract:

An overall and extensive prototype of an economy with industries exposed to scale economies is presented, using two prototypes from the urbaneconomics literature wherein scale economies are internal to the specific company. The first prototype by Kanemoto established that the equilibrium allocation is efficient if the company also serves as the developer of the city. The second prototype by Henderson and Abdel-Rahman demonstrated that an employment subsidy in the separated product industry is a second best remedy when the federal government is unable to interfere. Federal intervention, in terms of price controls, is needed to realize first-best efficiency.

Economic Planning & Research, Econometrics & Model Building, Usage, Econometrics, Economic conditions, Urban economics, Economies of scale, Business models, Demand functions (Economics), Demand functions

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Capital tax competition and returns to scale

Article Abstract:

The reasons why capital-importing regions subsidize some of the firms or units of capital located in their regions are analyzed. For the purpose of analysis, standard capital tax models are used. In an increasing returns scenario, marginal return on capital in a given region may be greater than the other region thereby bringing in a competition amongst regional governments to attract the capital. By subsidizing, the regional governments absorb the positive return from external capital.

Canada, Grants to Business, Regional economics, Subsidies, Capital levy, Capital taxes

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An empirical test of geographic knowledge spillovers using geographic information systems and firm-level data

Article Abstract:

According to this research, the location of Small Business Innovation Research grant awards is a function of the number of SBIR firms located in the same area, despite any varying firm, regional, or industry characteristics.

United States, Admin. of general economic programs, Small Business Administration, Finance, Small business, United States. Small Business Administration

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