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Interconnected communications networks and home market effects

Author

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  • Toru Kikuchi

Abstract

This study develops a model of trade that highlights the effects of the interconnection of country-specific communications networks as a driving force behind trade in high-tech products with positive transport costs. By constructing a two-country model of monopolistic competition with two production factors, it is shown that the locational decisions of firms may magnify the influence of interconnected networks. In a reversal of the standard home market effects, the abundance of unskilled labour in the developing countries can attract high-tech firms from the developed countries.

Suggested Citation

  • Toru Kikuchi, 2005. "Interconnected communications networks and home market effects," Canadian Journal of Economics, Canadian Economics Association, vol. 38(3), pages 870-882, August.
  • Handle: RePEc:cje:issued:v:38:y:2005:i:3:p:870-882
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    Citations

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    Cited by:

    1. Toru Kikuchi & Kazumichi Iwasa, 2009. "Competing Industrial Standards and the Impact of Trade Liberalization:Revised and Enlarged," Discussion Papers 0913, Graduate School of Economics, Kobe University.
    2. Kikuchi, Toru & Iwasa, Kazumichi, 2010. "A simple model of service trade with time zone differences," International Review of Economics & Finance, Elsevier, vol. 19(1), pages 75-80, January.
    3. Noritsugu Nakanishi & Ngo Van Long, 2015. "The Distributional and Allocative Impacts of Virtual Labor Mobility across Time Zones through Communication Networks," Review of International Economics, Wiley Blackwell, vol. 23(3), pages 638-662, August.
    4. Toru Kikuchi & Kazumichi Iwasa, 2009. "Interregional trade, industrial location and import infrastructure," International Economics and Economic Policy, Springer, vol. 6(4), pages 361-365, December.
    5. Toru Kikuchi, 2008. "Distribution Costs, International Trade and Industrial Location," Economics Bulletin, AccessEcon, vol. 6(24), pages 1-5.
    6. repec:ebl:ecbull:v:6:y:2008:i:24:p:1-5 is not listed on IDEAS
    7. Toru Kikuchi & Kazumichi Iwasa, 2011. "Competing Industrial Standards and the Impact of Trade Liberalization," International Economic Journal, Taylor & Francis Journals, vol. 25(2), pages 269-284.

    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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