Economic effects of industry transfers in a three-region model based on the footloose capital model

The locations of manufacturers and the agglomeration of industries steady affect the entire economic system and the individual agents in this system. This study uses the footloose capital (FC) model with a new economic geography to extend the two-region model into a more generalized three-region model to analyze the economic effects of industry transfers. This model gives explicit equations for the industry shares in each region when the overall economics turn from positive to negative with market equilibrium. The impact of industry transfers on the economics of the entire economy and of single individuals is investigated numerically. This paper provides a better understanding of the disparities in economic improvements caused by cross-region industry transfers.