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Firm Location Decisions, Regional Grants and Agglomeration Externalities
The authors examine whether discretionary government grants influence the location of new plants. Findings indicate that Grants have a small effect in attracting plants to specific geographic areas, but their effectiveness increases with agglomeration externalities,
measured by the number of other plants in that location in the same industry.
Geography
Link
http://www.aimresearch.org/workingpapers/038rgpaper.pdf