Abstract: The objective of this dissertation is to examine the role of firm heterogeneity in the agglomeration process and the latter’s effect on regional economic development. In the first essay, the effect of trade liberalization on agglomeration of high- and low-productivity firms is analyzed. By extending a new-economic-geography model, I find that international competition disperses low-productivity firms to less-developed regions. Trading with advanced countries also leads to dispersion of economic activity. In the second essay, I empirically test the hypothesis that high-productivity (exporting) plants in Chile self-select to locate in large markets. Plants’ productivity is computed to obtain regional productivity-distribution measures. Then, I find that high-productivity (exporting) plants indeed locate in a region where other plants in the same industry agglomerate, industrial structure is diversified and market size is large. In the third essay, I identify the mechanism by which human-capital spillovers occur at the plant-level and examine the relationship between spillovers and agglomeration of high skill-intensive plants in Chile. I employ plant-level production functions incorporating the absorptive capacity hypothesis. Empirically, in 5 out of 8 manufacturing industries, the benefit from spillovers is large to high skill-intensive plants. The results of the three essays reveal locational preferences of various types of firms and provide policy options for regional economic development depending on the type of firms attracted. The results help local governments’ evaluation of the benefits from each policy option, which when compared with their knowledge of costs, aid in the selection of an effective policy to improve regional well-being.
Ballard Extension Hall (campus map) |
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200C |
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2591 SW Campus Way |
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Corvallis |
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OR |
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Free |
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Tania Porter |
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1 541 737 1396 |
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tania.porter at oregonstate.edu |
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Agric and Resource Econ |
