Scandinavian Working Papers in Economics

Research Papers in Economics,
Stockholm University, Department of Economics

No 2010:5: Political Participation, Regional Policy and the Location of Industry

Magnus Wiberg ()
Additional contact information
Magnus Wiberg: Ministry of finance, Postal: Swedish Government Offices, SE-103 33 Stockholm, Sweden

Abstract: This paper analyzes the location of manufacturing activities when regional policy is determined by each region’s relative propensity to vote. Once voting over government transfers to regions is included in an economic geography framework with size asymmetries, the standard prediction that the larger region becomes the core when trade barriers are reduced no longer holds. The establishment of manufacturing production in the economically smaller region is increasing in the level of regional integration. As trade is increasingly liberalized, the economy eventually features a reversed core-periphery equilibrium where all firms reside in the South. It is further shown that the relative political participation rate increases in the factor scarce region as trade is liberalized. Empirical evidence shows that the model is consistent with qualitative features of the data.

Keywords: Economic Geography; Regional Policy; Voter Turnout

JEL-codes: D72; F12; R12

49 pages, April 14, 2010

Full text files

wp10_05.pdf PDF-file 

Download statistics

Questions (including download problems) about the papers in this series should be directed to Sten Nyberg ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-01-23 23:38:25.