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Endogenous Sunk-Costs Technology and Home Market Effects

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  • Shin-Chyang Lee

Abstract

Sutton (1991, 1998) proves that the home market effects would reverse with the assumption of the labor requirements with endogenous sunk costs. Departing from the original Helpman-Krugman modeling assumptions, we introduce the endogenous sunk costs of production to trading partners, and show that home market effects will be offset but not reverse, a result opposite of Sutton (1991, 1998).

Suggested Citation

  • Shin-Chyang Lee, 2016. "Endogenous Sunk-Costs Technology and Home Market Effects," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(3), pages 117-122, March.
    • Handle: RePEc:ibn:ijefaa:v:8:y:2016:i:3:p:117-122
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    References listed on IDEAS

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    More about this item

    Keywords

    endogenous sunk costs; home market effects;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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