Footloose Capital and the Locational Advantage of a Hub

Economics Bulletin, 2008, vol. 6, issue 43, 1-9

Abstract: The purpose of this study is to illustrate, with a simple three-region (located on a line), two-good (homogeneous good/differentiated high-tech products), two-factor (labor/"footloose" capital) model, how falling transport costs can affect firms' location decisions and trade structure. It is shown that the locational advantage of a central hub is magnified via firms'' location decisions.

Keywords: Footloose; Capital; Hub; Transport; Costs (search for similar items in EconPapers)
JEL-codes: F1 (search for similar items in EconPapers)
Date: 2008-10-09
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Working Paper: Footloose Capital and Locational Advantage of a Hub (2008)
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