We visit the role of privatization in the location decision of firms in an industry where no firm can produce all varieties demanded. We demonstrate that the Nash equilibrium locations are socially optimal, in the presence of a publicly owned firm, notwithstanding the degree of privatization.

In linear-city models, if firms are allowed (not allowed) to locate outside the linear city, they engage in excessive (insufficient) R&D investments from the normative viewpoint. This implies that the feasible set of locations drastically affects their investments.

Recent surges of China's outward FDI feature four stylized facts: China's OFDI is predominately conducted by state owned or state controlled enterprises (SOEs); a large proportion of such OFDI takes the form of cross-border M&A; most of the target firms are failing firms, which lead to poor...

This paper studies product differentiation decisions in a spatial duopoly with limited information on consumer demand. In particular, a situation is discussed in which the firms do not know the exact distribution of the random location of consumer demand and its responsiveness to price changes...

We set-up a linear city model with duopoly upstream and downstream. Consumers have a transportation cost when buying from a retailer, and retailers have a transportation cost when buying from a wholesaler. We characterize the equilibria in a five-stage game where location and pricing decisions...

When firms cluster in the same local labour market, they face a trade-off between the benefits of labour pooling (i.e., access to workers whose knowledge helps reduce costs) and the costs of labour poaching (i.e., loss of some key workers to competition and the indirect effect of a higher wage...

We study the effects of a decrease in trade costs on the spatial distribution of industry in a multi-regional economy, when a rise in the regional population of workers generates higher urban costs. When the number of cities is unaffected by falling trade costs, small cities become smaller for...

This Paper focuses on two distinct facets of globalization: the decrease in the trade costs of goods and the decline of communication costs between headquarters and production facilities within firms. When the unskilled have about the same wage in the two regions, the decrease of these costs...

Increasing returns in matching between skilled workers and firms create a local thick-market externality when labour markets are geographically segmented. This generates an agglomeration force that can offset the dispersion force due to local competition in a segmented product market. When this...

In modern economies, the amount of profits distributed to shareholders is far from being negligible. We show that the way profits are distributed among agents matters for the space-economy. For example, the existence of mobile rentiers is sufficient to make the symmetric configuration unstable...