Working Paper: CEPR ID: DP3875
Authors: Niko Matouschek; Frédéric Robert-Nicoud
Abstract: We explore the role of human capital investments in the location decisions of firms. We show that whether human capital investments act as a force for or against concentration depends on who is undertaking them and whether they are industry- or firm-specific. We also discuss the empirical predictions of our theoretical analysis.
Keywords: firm location; human capital investment
JEL Codes: J41; R13; R30
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Human capital investments (J24) | Firm location decisions (R30) |
| Firm location decisions (R30) | Labor market imperfections (J42) |
| Labor market imperfections (J42) | Incentives for workers to invest in human capital (J24) |
| Firm concentration (L11) | Incentives for workers to invest in human capital (J24) |
| Firm dispersion (F12) | Underinvestment in skills by workers (J24) |
| Investments by firms (F23) | Spatial dispersion of firms (R32) |
| Investments by workers (J54) | Spatial concentration of firms (R32) |
| Balance of investment incentives (F21) | Optimal location decision (R32) |