This paper examines the extent to which agglomeration of the hospital service industry enhances the productivity of producing health care. Specifically, we use a large set of private insurance claims from the FAIR Health database to show that an increasing spatial concentration of hospital services results in a decreased cost of obtaining intermediate medical services. We explicitly test whethe...

This paper models the competition among jurisdictions for two firms in the same industry as a sequential auction. Before choosing a site, the firms solicit fiscal incentives from jurisdictions. In the presence of agglomeration economies, winning the first location contest makes a region more attractive for subsequent firms. The first firm receives a higher recruitment subsidy and the second fir...