Co nip e t it iv e Ad van tag e, Agglom era t io it Ecortonzies, and Regional Policy

From different directions and traditions, there is a growing interest in the effect of location on competition and economic geography. From my work at the level of the firm and industry, I find in Markusen’s (1996) article an opportunity to engage the literature on regional development. Especially since beginning research for my book The Competitive Advantage of Nations, I have been interested in how location affects competitive advantage and how firms choose headqu‘mters locations from a strategic perspective. This article is just one piece of a remarkable body of work by Markusen, and I agree with much of her work. Here I comment on six areas in which I believe her analysis could be sharpened and the literature as a whole extended. The Scope of Agglomeration Economies Markusen focuses on generalized urban agglomeration economies in areas such as infrastructure, communications, input access, and available market. I agree that such economies can be significant in developing coun-tries with poor infrastructure, centralized institutions, and a heavy role fo