Heterogene Standortqualitäten und Signalstrategien: Ansiedlungsprämien, Werbung und kommunale Leuchtturmpolitk

Abstract This article analyses and compares three in reality observable instruments designed to promote regional development: opening bonuses, advertisement and light-house-policy. We undertake the hopeful attempt to figure a marketplace of industrial locations where location-seeking mobile factors and location-offering jurisdictions exchange goods providing reciprocal advantage. Observing that location- seekers are unable to attain full information about the locations quality we show the importance of signalling. An undemanding model answers the fascinating question how tax-reductions for new direct investments, ads and the so called “light-house-policy” known as a specialty of East-German regional marketing can mitigate the risk associated with decisions of industrial location.