Regional Income Disparities, Monopoly & Finance

32 Pages Posted: 7 Oct 2019

See all articles by Maryann P. Feldman

Maryann P. Feldman

University of North Carolina at Chapel Hill; University of North Carolina (UNC) at Chapel Hill - Department of Public Policy; Kenan Flagler Business School

Frederick Guy

University of London - Birkbeck College

Simona Iammarino

London School of Economics & Political Science (LSE) - Department of Geography and Environment

Date Written: October 3, 2019

Abstract

Many of the most prosperous places in the U.S. are hotbeds of technology and also the home bases of companies which exercise monopoly power across much larger territories – nationally, or even globally. This paper makes four arguments about regional income disparities. First, monopoly, and the market for new prospective monopolies amplifies agglomeration economies, making locations invincible and inimitable. Second, the taxes imposed by the monopoly firms on a wide range of economic activity, together with the restrictions they are able to impose on the dissemination and use of technology, further inhibit local economic development in other places. Third, financialization – the power of the financial sector over both firms which are receiving financing and firms which are paying cash out – serves to feed these spatially concentrated monopolies at the expense of other places and industries. Finally, we conclude that the most efforts at local economic development would be best furthered by breaking up the concentrated economic power of technology and finance.

Keywords: regional income distribution, monopoly, market power, economic geography, technology, financial capital

JEL Classification: R11, R12, F61, F62, F65, O33

Suggested Citation

Feldman, Maryann P. and Guy, Frederick and Iammarino, Simona, Regional Income Disparities, Monopoly & Finance (October 3, 2019). Kenan Institute of Private Enterprise Research Paper No. 19-32, Available at SSRN: https://ssrn.com/abstract=3463735 or http://dx.doi.org/10.2139/ssrn.3463735

Maryann P. Feldman (Contact Author)

University of North Carolina at Chapel Hill ( email )

CB 3435
University of North Carolina
Chapel Hill, NC 27599-3140
United States

HOME PAGE: http://maryannfeldman.web.unc.edu/

University of North Carolina (UNC) at Chapel Hill - Department of Public Policy ( email )

Abernathy Hall
Chapel Hill, NC 27599-3435
United States

Kenan Flagler Business School ( email )

Chapel Hill, NC
United States

Frederick Guy

University of London - Birkbeck College ( email )

Malet Street
London, WC1E 7HX
United Kingdom

Simona Iammarino

London School of Economics & Political Science (LSE) - Department of Geography and Environment ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

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