Posts Tagged ‘D8’

AGGLOMERATION ECONOMICS AND ASYMMETRIC INFORMATION: ROLE OF INSTITUTIONS

Vinko MUŠTRA[1]

Associate professor, Faculty of Economics, Business and Tourism, University of Split

vmustra@efst.hr

Hrvoje KALINIĆ

Assistant professor, Faculty of Science, University of Split

hrvoje.kalinic@pmfst.hr

Abstract

This paper constructs the model that links agglomeration economics with information asymmetries. It extends the literature by launching the concept that explains influence of the asymmetric information on agglomeration economies by emphasizing the role of the transaction cost under institutional framework. Consequently, the predictions of the model suggesting that impact of agglomeration economies depends on stages of development highlight the importance of different approach to the agglomeration economies phenomena in developing  and developed countries.

Keywords: agglomeration economics, asymmetric information, transaction costs, institutions

JEL classification: R1, O4, D8

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[1] Corresponding author