The effect of capital flow on the agglomeration evolution of footloose entrepreneurs
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To answer whether capital mobility exacerbates or dampens the agglomerative tendency of footloose entrepreneurs, this paper incorporates a footloose capital with a footloose-entrepreneur manufacturing industry based on a tractable analytical structure with two identical regions. The model shows that these two sectors interact with each other, and features five types of equilibrium configurations. Most interestingly, this paper finds that the mobility of physical capital plays a stabilizing role in the catastrophic agglomeration caused by footloose entrepreneurs.
KeywordsFootloose capital Footloose entrepreneur Pitchfork bifurcation Agglomeration evolution New economic geography
JEL ClassificationF12 F15 F21 F22 R12
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Conflict of interest
There is no potential conflicts of interest in the study.
The manuscript has not been published and has not been submitted to other journals for simultaneous consideration.
Research involving human participants
This article does not contain any studies and/or animals with human participants or animals performed by any of the authors.
There is no other individual participant included in the study.
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