History and industry location: Evidence from German airports

Stephen J. Redding, Daniel M. Sturm, Nikolaus Wolf

Research output: Contribution to journalArticlepeer-review

100 Scopus citations


Abstract-A central prediction of a large class of theoretical models is that industry location is not uniquely determined by fundamentals. Despite the theoretical prominence of this idea, there is little systematic evidence in support of its empirical relevance. This paper exploits the division of Germany afterWorldWar II and the reunification of East andWest Germany as an exogenous shock to industry location. Focusing on a particular economic activity, an air hub, we develop a body of evidence that the relocation of Germany's air hub from Berlin to Frankfurt in response to division is a shift between multiple steady states.

Original languageEnglish (US)
Pages (from-to)814-831
Number of pages18
JournalReview of Economics and Statistics
Issue number3
StatePublished - Aug 2011

All Science Journal Classification (ASJC) codes

  • Social Sciences (miscellaneous)
  • Economics and Econometrics


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