This paper attempts to integrate location theory with the economics of advertising. One of the most important propositions established is that the equilibrium location of the firm is independent of advertising if and only if the production function is homogeneous of degree one. Moreover, it is shown that whether advertising is socially excessive or insufficient and the resulting effects on input usage depend crucially upon whether output and advertising are complements, independences or substitutes.
Relation:
International Journal of Industrial Organization 6(2), pp.223-231
