Endogenous firm location is analyzed in a discrete two-region-two-firm model of product differentiation. In a non-cooperative game, two regional governments first decide on the imposition (or lifting) of domestic production standards; firms then choose technology (clean or polluting), location...

For a long time, it was assumed that hard location factors (e.g. workforce, land) were the primary influence on the location decisions of firms. In the course of the tertiarization of the economy and linked increases in the qualification of employees as well as changes in values and timemodels,...