Trade, market size, and industrial structure: revisiting the home-market effect
AbstractThis paper shows that the issues in the recent discussion over the `home-market effects' are more complicated than previously thought. It is shown that, in general, market size matters for industrial structure even when both the homogeneous and the differentiated goods face transport costs. The home-market effect for production structure can arise, disappear, or even reverse in sign. The analysis shall change a common perception about de-industrialization of (small) economies and may also have important implications for the empirical research strategies in this area.
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Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 38 (2005)
Issue (Month): 1 (February)
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Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4
Web page: http://economics.ca/cje/
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Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
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- Yamamoto, Kazuhiro, 2008. "Location of industry, market size, and imperfect international capital mobility," Regional Science and Urban Economics, Elsevier, vol. 38(5), pages 518-532, September.
- Behrens, Kristian & Lamorgese, Andrea R. & Ottaviano, Gianmarco I.P. & Tabuchi, Takatoshi, 2009.
"Beyond the home market effect: Market size and specialization in a multi-country world,"
Journal of International Economics,
Elsevier, vol. 79(2), pages 259-265, November.
- Gianmarco I.P. Ottaviano & Kristian Behrens & Andrea R. Lamorgese & Takatoshi Tabuchi, 2009. "Beyond the Home Market Effect: Market Size and Specialization in a Multi-Country World," Working Papers 2009.119, Fondazione Eni Enrico Mattei.
- Kristian Behrens & Andrea R. Lamorgese & Gianmarco I.P. Ottaviano & Takatoshi Tabuchi, 2009. "Beyond the Home Market Effect: Market Size and Specialization in a Multi-Country World," KITeS Working Papers 023, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jul 2009.
- Kyoko Hirose & Yushi Yoshida, 2010. "Intra-National Regional Heterogeneity in International Trade," Discussion Papers 42, Kyushu Sangyo University, Faculty of Economics.
- Dao-Zhi Zeng & Toru Kikuchi, 2005. "The Home Market Effect and the Agricultural Sector," ERSA conference papers ersa05p135, European Regional Science Association.
- Takatsuka, Hajime & Zeng, Dao-Zhi, 2012. "Trade liberalization and welfare: Differentiated-good versus homogeneous-good markets," Journal of the Japanese and International Economies, Elsevier, vol. 26(3), pages 308-325.
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