This paper models the competition among jurisdictions for two firms in the same industry as a sequential auction. Before choosing a site, the firms solicit fiscal incentives from jurisdictions. In the presence of agglomeration economies, winning the first location contest makes a region more attractive for subsequent firms. The first firm receives a higher recruitment subsidy and the second fir...

The fraction of persons holding a college degree differs nearly two-fold across U.S. states. This paper documents data related to state educational attainment differences and explores possible explanations. It shows that highly educated states employ skillbiased technologies, specialize in skill-intensive industries, but do not pay lower skill premia than do less educated states. Moreover, meas...

This paper identifies the main sources of urban increasing returns, after Marshall. The geographical distance across which externalities flow is also examined. We bring to bear on these questions plant-level data organized in the form of a panel across the years 1989 and 1999. Plant-level production functions are estimated across the Canadian manufacturing sector as a whole and for five broad i...

We show that temporary place-based subsidies generate persistent effects on economic density. As our design allows us to control for agglomeration economies, we attribute an important role to policy-induced locational advantage (e.g. capital structures) in explaining persistent spatial patterns of economic activity. With regard to distributional implications, we show that subsidies have capital...