The Response of Creative Class Members to Regions Vying to Attract Them With Subsidies

There are no theoretical studies in regional science that examine which region to locate from the standpoint of a creative class member, given pertinent authorities (RAs) competing among themselves attract using subsidies. This gap provides motivation for our paper. paper’s contribution is it first theoretically study location choice members when RAs locations they might subsidies them. Specifically, knowledge good producing member must decide two regions ( A or B) his plant in. produced Cobb–Douglas function with and physical capital. We analyze four cases. In benchmark case, we show representative ought less expensive B. Next, small subsidy capital by switches decision B A. Finally, both grant identical capital, indifferent between locating So, affect decision, better targeted not JEL Codes: R11, R58