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Agglomeration, Regional Grants and Firm Location
The authors examine whether discretionary government grants influence the location of new plants, and how effective these incentives are in the presence of agglomeration and urbanisation
externalities. Findings indicate evidence that regional industrial structure affects the location of new entrants.
Link
http://www2.warwick.ac.uk/fac/soc/economics/staff/faculty/devereux/wp/agglomeration.pdf