Modeling the Location Choice: Evidence from an Evolutionary Game Based on Regional Input-Output Analysis

Rocha, A., Silveira, D., Perobelli, F., & Vasconcelos, S. (2019). Modelling the location choice: evidence from an evolutionary game based on regional input–output analysis. Regional Studies, 1-13.

31 Pages Posted: 18 Jul 2019

See all articles by Ademir Rocha

Ademir Rocha

University of São Paulo, Students

Douglas Silveira

University of Alberta - Department of Economics

Fernando Salgueiro Perobelli

Universidade Federal de Juiz de Fora

Silvinha Vasconcelos

Universidade Federal de Juiz de Fora - Department of Economics

Date Written: June 27, 2019

Abstract

This paper combines evolutionary game theory and input–output analysis to assess firms’ strategic location choice. To evaluate the model, firms competed in the automotive sector of Mercosur. To decide where to locate, the following exogenous factors were considered: potential market; local productive interdependence; tax incentive; and macroeconomic stability. Firms assigned weights to these factors in their location decision. It was found that competing in a market where there is tax exemption is not always an ideal location decision, contradicting the common-sense assumption by which there is a direct relationship between government incentives and the attractiveness of regions.

Keywords: location decision, strategic interaction, input–output analysis

JEL Classification: C70, R12

Suggested Citation

Rocha, Ademir and Silveira, Douglas and Perobelli, Fernando Salgueiro and Vasconcelos, Silvinha, Modeling the Location Choice: Evidence from an Evolutionary Game Based on Regional Input-Output Analysis (June 27, 2019). Rocha, A., Silveira, D., Perobelli, F., & Vasconcelos, S. (2019). Modelling the location choice: evidence from an evolutionary game based on regional input–output analysis. Regional Studies, 1-13., Available at SSRN: https://ssrn.com/abstract=3421402

Ademir Rocha

University of São Paulo, Students ( email )

Ave Prof Luciano Gualberto 908
São Paulo
Brazil

Douglas Silveira (Contact Author)

University of Alberta - Department of Economics ( email )

Edmonton, Alberta T6G 2R6
Canada

Fernando Salgueiro Perobelli

Universidade Federal de Juiz de Fora ( email )

Brazil

Silvinha Vasconcelos

Universidade Federal de Juiz de Fora - Department of Economics

Juiz de Fora, Minas Gerais
Brazil

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