Working Paper

Locational Competition - A Neglected Paradigm in the International Division of Labour


  • Siebert
  • H.
Publication Date

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


JEL Classification
F, H, J

Key Words

  • Capital exports and exports of goods as complements or substitutes
  • Competitiveness of countries
  • Exit option of capital
  • Impact of capital exports on the capital-exporting country and its employment
  • Locational competition and global public goods and externalities
  • Locational competition as a discovery device
  • Manoeuvring space of governments
  • Mobile and immobile factors of production
  • Single world equilibrium versus many national equilibriums