The District and the Global Economy: Exportation Versus Foreign Location |
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| Authors: | Giorgio Basevi,& Gianmarco I.P. Ottaviano |
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| Affiliation: | Universitàdi Bologna, Bologna, Italy,;UniversitàCommerciale 'Bocconi', Instituto di Economia Politica, Milan, Italy |
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| Abstract: | We depict an industrial district as a center of innovation where positive local spillovers sustain the endogenous invention of new goods by profit-seeking firms. After invention, firms face a crucial choice between reaching distant markets by export or plant delocation. Attempts by firms to circumvent trade barriers through delocation slow down the pace of innovation and harm the welfare of the district. |
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