This paper tests the hypothesis that product market competition has a negative impact on spatial agglomeration. This hypothesis emerges as an interpetation of the models by Combes and Duranton (2001) and Alsleben (2005) which are about firms' location choice in the presence of knowledge...

This article introduces a social planner version of a model central to the New Economic Geography for explicitly answering whether the symmetric equilibrium outcome of the decentralized market economy is socially desirable. We find that savings incentives are too weak, resulting in an...