Working Paper
Locational Competition - A Neglected Paradigm in the International Division of Labour
Krugman's verdict that competitiveness of countries is a largely meaningless concept is a serious misjudgement of the economics profession. Countries compete for the mobile factors of production, most importantly for capital and technology. The exit-optio
Key Words
- Competitiveness of countries
- Mobile and immobile factors of production
- Exit option of capital
- Impact of capital exports on the capital-exporting country and its employment
- Capital exports and exports of goods as complements or substitutes
- Manoeuvring space of governments
- Locational competition as a discovery device
- Locational competition and global public goods and externalities
- Single world equilibrium versus many national equilibriums