Firm Heterogeneity and the Localization of Economic Activities
This paper examines how market-access strategies, via exports and FDI, respond to changes in the level of integration. Empirical evidence shows that both firm exports and multinational activity are affected by trade-liberalization episodes. We account for the strong positive correlation between exports and FDI by developing a general-equilibrium model featuring firm heterogeneity, trade and FDI with final and intermediate products. Different geographical spaces 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 both inside and outside the PTA area.
|Date of creation:||27 Oct 2013|
|Date of revision:|
|Note:||View the original document on HAL open archive server: http://hal.archives-ouvertes.fr/hal-00877201|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
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.:
- 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.
- 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," Working Papers 2009.119, Fondazione Eni Enrico Mattei.
- 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 Xiaoyang & Moore, Michael, 2009.
"Location decision of heterogeneous multinational firms,"
33482, University Library of Munich, Germany.
- 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.
- Maggie Xiaoyang Chen & Michael Owen Moore, 2009. "Location Decisions of Heterogeneous Multinational Firms," Working Papers 2009-17, The George Washington University, Institute for International Economic Policy.
- Blonigen, Bruce A. & Davies, Ronald B. & Waddell, Glen R. & Naughton, Helen T., 2007.
"FDI in space: Spatial autoregressive relationships in foreign direct investment,"
European Economic Review,
Elsevier, vol. 51(5), pages 1303-1325, July.
- Bruce A. Blonigen & Ronald B. Davies & Glen R. Waddell & Helen T. Naughton, 2004. "FDI in Space: Spatial Autoregressive Relationships in Foreign Direct Investment," NBER Working Papers 10939, National Bureau of Economic Research, Inc.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:hal-00877201. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD)
If references are entirely missing, you can add them using this form.