Trade and Location with Horizontal and Vertical Multi-region Firms
AbstractWe analyse the effect on agglomeration tendencies of allowing multi-region firms in a standard trade and location model, the core-periphery (CP) model developed by Kurgman (1991). The introduction of horizontal multi-region firms mitigates the agglomeration effects found in the CP model by reducing the range of trade costs for which the core-periphery equilibrium occurs. The introduction of vertical multi-region firms that separate the location of headquarters and plants has two counteracting effects. While headquarters exhibit a strong tendency to concentrate, plants tend to spread out. The equilibrium is always asymmetric in spite of the underlying symmetry of the model. Copyright 2001 by The editors of the Scandinavian Journal of Economics.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.
Volume (Year): 103 (2001)
Issue (Month): 1 (March)
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Web page: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442
Other versions of this item:
- Ekholm, Karolina & Forslid, Rikard, 1998. "Trade and Location with Horizontal and Vertical Multi-Region Firms," Working Paper Series 504, Research Institute of Industrial Economics.
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F15 - International Economics - - Trade - - - Economic Integration
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
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