Market Power in the Market for Business Locations and Firm-Specific Incentives in the U.S.
Keywords:
business, economics, student performance, business data management and information systems, motivation factors, distraction factors, self-perceived factors, prior ability factors, gender and ageAbstract
This paper proposes a transactional framework for understanding firm-specific incentives, highlighting the interplay between firms and communities in the market for business locations. This framework allows us to show how by exploiting price discrimination the firms in possession of significant market power can extract communities’ surpluses by means of various firm-specific incentives. The findings align with previously reported empirical results that demonstrate that large firms are more likely to secure firm-specific subsidies. Future research should explore the determinants of large firms’ market power and why communities prioritize attracting them over smaller firms.
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