Market Potential and the Location of Japanese Investment in the European Union ∗ Keith Head †

@inproceedings{Mayer2000MarketPA,
  title={Market Potential and the Location of Japanese Investment in the European Union ∗ Keith Head †},
  author={Thierry Mayer},
  year={2000}
}
We investigate the hypothesis that firms prefer to locate “where the markets are.” We use a theoretical model of location choice under imperfect competition to formalize this concept. The model yields a profit function incorporating a term closely connected to the market potential index introduced by Harris in 1954. The location decision is a function of demand in all locations weighted by accessibility to consumers. We also show how the spatial distribution of competitors should be factored… CONTINUE READING
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