The Annals of Regional Science

, Volume 41, Issue 4, pp 857–875 | Cite as

Knowledge–capital meets new economic geography

  • Peter Egger
  • Stefan Gruber
  • Mario Larch
  • Michael Pfaffermayr
Original Paper


This paper introduces multinational firms in a new economic geography model. There, unskilled labor mobility leads to less concentration of production than skilled labor mobility does. This is in line with empirical evidence that agglomeration of production in Europe is less pronounced than in the United States. The different patterns in (skilled versus unskilled) labor mobility together with the presence of multinational firms form one explanation of the actual differences in the spreading of industries in Europe as compared to the US

JEL Classification

F12 F23 R12 R13 


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Copyright information

© Springer-Verlag 2007

Authors and Affiliations

  • Peter Egger
    • 1
  • Stefan Gruber
    • 2
  • Mario Larch
    • 1
  • Michael Pfaffermayr
    • 2
  1. 1.Ifo Institute for Economic Research and University of MunichMunichGermany
  2. 2.Faculty of Economics and StatisticsUniversity of InnsbruckInnsbruckAustria

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