Modeling industrial location decisions in U.S. counties



following concentrated likelihood function,

I r ∖∖     1   n ns   exp(θ0y sc)

log L = S S nsc k4 " PC= 1 expose).

S Cs       n S Cs

log L = Σ Σnsc log( ns)) + Σ ΣnscPc∕s.

s=1 c=1                   s=1 c=1

(A1)


where,

_    exp(β0 Zsc)

pC/S~ PC= ι exp(β0zsc).

is the probability of an investor locating in a particular county, conditional
on the chosen state. The first term in expression (A1) is a constant. The
second term is the log-likelihood for a discrete choice problem where the
choice sets are restricted to the states where the investments were observed.

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