Regional amenity exerts significant impact on location choice of heterogeneous firms as well as spatial distribution of economy. So far there have been very few studies on the role of regional amenity in location choice and capital flows of heterogeneous firms, and on the impact of amenity on the local investment performance. Basing on the FC model, this paper founds a general equilibrium model to study these topics. The conclusion demonstrates that finns migration influenced by amenity, which will change the spatial sorting effects resulted from firm heterogeneity. The public investment polic...
