1994 Reports

The Philosophy of Locational Competition

Findlay, Ronald E.

"While Standortswettbewerb may be a familiar term in the German economics literature,
with a long tradition in location theory going back to von Thunen and Losch, its English
counterpart "locational competition" does not ring any bells, at least to me. One possible
meaning, it would seem, is the choice of sites by firms at which to locate various production or
marketing facilities to maximize their profits, given what their competitors are doing. It would
thus constitute the geographical dimension of competition between oligopolists and as such
would bring into play the full panoply of the location theorist's exotic arsenal of hexagons,
isodapones, and whatever else have you.
Somehow I do not think that this is what Professor Horst Siebert had in mind when he
invited me to write a paper on this subject, which is the theme of our conference. What he
appears to want us to understand by this phrase is rather competition between nations, not firms,
to attract within their borders as much as possible of global pools of internationally mobile
factors, thus raising the incomes of complementary immobile factors confined within those
borders. In any case, this is the sense in which I will interpret the term in this paper."