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Location of industry, market size, and imperfect international capital mobility

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  • Yamamoto, Kazuhiro

Abstract

This paper examines the impact of imperfect international capital mobility on an industrial location when increasing returns are present. When the international capital mobility is perfect, agglomeration of manufacturing firms progresses with a decline in transportation costs of manufactured goods, and full-agglomeration in a large-market country is observed at low transportation costs. In contrast, when international capital mobility is imperfect, agglomeration in a large-market country progresses with capital trade integration. When the transportation costs of manufactured goods are low, all capital holders in two countries invest their capital into a home market.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:regeco:v:38:y:2008:i:5:p:518-532
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    Cited by:

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    2. Dao-Zhi Zeng, 2016. "Capital mobility and spatial inequalities in income and industrial location," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 14(1), pages 109-128, March.
    3. Yao Li, 2012. "Capital mobility, diminishing returns and wage inequality," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 21(3), pages 321-345, March.
    4. J. Clemente & G. Larramona & V. Montuenga, 2013. "Scale and composition effects of human capital on Spanish regional migration," Applied Economics Letters, Taylor & Francis Journals, vol. 20(18), pages 1644-1647, December.
    5. Hajime Takatsuka & Dao‐Zhi Zeng, 2022. "Mobile capital, optimal tariff, and tariff war," Review of International Economics, Wiley Blackwell, vol. 30(1), pages 166-204, February.
    6. Ren Lu & Torger Reve & Jing Huang & Ze Jian & Mei Chen, 2018. "A Literature Review Of Cluster Theory: Are Relations Among Clusters Important?," Journal of Economic Surveys, Wiley Blackwell, vol. 32(4), pages 1201-1220, September.

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