History and industry location: Evidence from German airports
A central prediction of a large class of theoretical models is that industry location is not uniquely determined by fundamentals. Despite the theoretical prominence of this idea, there is little systematic evidence in support of its empirical relevance. This paper exploits the division of Germany afterWorldWar II and the reunification of East andWest Germany as an exogenous shock to industry location. Focusing on a particular economic activity, an air hub, we develop a body of evidence that the relocation of Germany's air hub from Berlin to Frankfurt in response to division is a shift between multiple steady states.
Stephen J. Redding, Daniel M. Sturm and Nikolaus Wolf
21 August 2011
Review of Economics and Statistics 93(3), pp.814-831, 2011
https://www.mitpressjournals.org/doi/10.1162/REST_a_00096
This Journal article is published under the centre's Urban programme.
This publication comes under the following theme: What determines urban growth and urban decline and what should be the role of policy?