Firm Heterogeneity and the Localization of Economic Activities
AbstractThis paper examines how market access strategies, export and FDI, respond to changes in level of integration. Empirical evidence shows that both rm exports and multinational activity are affected by trade liberalization episode. To account for the strong positive correlation between export and FDI, we develop a general equilibrium model that features firm heterogeneity, trade and FDI with final and intermediate products. Di erent spatial networks are considered to quantify the effect of a preferential trade agreement (PTA) on supply mode decisions, for both partner and excluded countries. The model sheds new light on the mechanisms through which geography reshapes the concentration of economic activities inside and outside the PTA area.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise in its series THEMA Working Papers with number 2013-25.
Date of creation: 2013
Date of revision:
Contact details of provider:
Postal: 33, boulevard du port - 95011 Cergy-Pontoise Cedex
Phone: 33 1 34 25 60 63
Fax: 33 1 34 25 62 33
Web page: http://thema.u-cergy.fr
More information through EDIRC
Heterogeneous firms; PTA; Spatial networks; Intrafirm trade;
Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
- F15 - International Economics - - Trade - - - Economic Integration
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-05-24 (All new papers)
- NEP-CSE-2013-05-24 (Economics of Strategic Management)
- NEP-GEO-2013-05-24 (Economic Geography)
- NEP-URE-2013-05-24 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Horstmann, Ignatius J. & Markusen, James R., 1992. "Endogenous market structures in international trade (natura facit saltum)," Journal of International Economics, Elsevier, vol. 32(1-2), pages 109-129, February.
- S. Lael Brainard, 1993. "A Simple Theory of Multinational Corporations and Trade with a Trade-Off Between Proximity and Concentration," NBER Working Papers 4269, National Bureau of Economic Research, Inc.
- Maggie Xiaoyang Chen & Michael Owen Moore, 2009.
"Location Decisions of Heterogeneous Multinational Firms,"
2009-17, The George Washington University, Institute for International Economic Policy.
- Chen, Maggie Xiaoyang & Moore, Michael O., 2010. "Location decision of heterogeneous multinational firms," Journal of International Economics, Elsevier, vol. 80(2), pages 188-199, March.
- Chen, Maggie Xiaoyang & Moore, Michael, 2009. "Location decision of heterogeneous multinational firms," MPRA Paper 33482, University Library of Munich, Germany.
- Richard Baldwin, 2005. "Heterogeneous Firms and Trade: Testable and Untestable Properties of the Melitz Model," NBER Working Papers 11471, National Bureau of Economic Research, Inc.
- 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,"
2009.119, Fondazione Eni Enrico Mattei.
- 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.
- 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.
- Chen, Maggie X., 2009.
"Regional economic integration and geographic concentration of multinational firms,"
European Economic Review,
Elsevier, vol. 53(3), pages 355-375, April.
- Maggie X. Chen, 2008. "Regional Economic Integration and Geographic Concentration of Multinational Firms," Working Papers 2009-07, The George Washington University, Institute for International Economic Policy.
- Gordon H. Hanson & Raymond J. Mataloni & Matthew J. Slaughter, 2001.
"Expansion Strategies of U.S. Multinational Firms,"
0012, Bureau of Economic Analysis.
- Badi H. Baltagi & Peter Egger & Michael Pfaffermayr, 2007.
"Estimating Regional Trade Agreement Effects on FDI in an Interdependent World,"
Center for Policy Research Working Papers
100, Center for Policy Research, Maxwell School, Syracuse University.
- Baltagi, Badi H. & Egger, Peter & Pfaffermayr, Michael, 2008. "Estimating regional trade agreement effects on FDI in an interdependent world," Journal of Econometrics, Elsevier, vol. 145(1-2), pages 194-208, July.
- Behrens, Kristian & Lamorgese, Andrea R. & Ottaviano, Gianmarco I.P. & Tabuchi, Takatoshi, 2007.
"Changes in transport and non-transport costs: Local vs global impacts in a spatial network,"
Regional Science and Urban Economics,
Elsevier, vol. 37(6), pages 625-648, November.
- Kristian Behrens & Andrea R. Lamorgese & Gianmarco I.P. Ottaviano & Takatoshi Tabuchi, 2007. "Changes in transport and non transport costs: local vs. global impacts in a spatial network," Temi di discussione (Economic working papers) 628, Bank of Italy, Economic Research and International Relations Area.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marion Oury).
If references are entirely missing, you can add them using this form.