Interregional trade, industrial location and import infrastructure
The purpose of this study is to illustrate, with a simple two-region, two-good, two-factor model, how an improvement in one regionfs import infrastructure can affect firmsf location decisions and the nature of the trading equilibrium. It is shown that, through improvements in import infrastructure, one region might divert high-tech industries to another region. This effect reduces the incentive to improve import infrastructure.
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