NEW FIRM LOCATION - AN EQUILIBRIUM-MODEL AND ITS DISEQUILIBRIUM DYNAMICS

This paper is centered on two basic statements: i) the birth of new fi rms is spatially related to location factors endowment and ii) the set of location factors can support only up to a given number of firms. T he paper firstly defines the regional ex-ante demand for firms as a fu nction of location factors set. In the following step a definition of regional equilibrium stock of firms is given and a static equilibrium model of new firms birth is built up. In a dynamic disequilibrium mode l the net birth of firms is a function of two disequilibrium terms: a sectoral and a regional one. The sectoral disequilibrium depends on th e industry production structure, the regional disequilibrium is linked to the adaptation elasticity of location factors set to an exogenous shock. Finally, a first estimation on Italian data is performed, on th e basis of which some new lines of analysis are suggested.