Will Labour Intensive Industries Always Locate in Labour Abundant Countries?
The purpose of this paper is to analyse how trade liberalisation affects location decisions of firms in vertically linked industries with different factor intensities. Firms can choose to locate either in a low wage, labour abundant, country or a low rental, capital abundant, country. We derive a number of results. At high levels of trade costs upstream and downstream firms locate in both countries. At low levels of trade costs location is according to comparative cost, with labour intensive firms locating in the low wage country and capital intensive firms in the low rental country. For some intermediate levels of trade costs there may be an agglomeration of upstream and downstream firms in one country. Whether the industries agglomerate in the low wage or the low rental country is likely to depend on the relative differences in factor prices.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||1998|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.latrobe.edu.au/economics|
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ltr:wpaper:1998.02. 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: (Stephen Scoglio)The email address of this maintainer does not seem to be valid anymore. Please ask Stephen Scoglio to update the entry or send us the correct email address
If references are entirely missing, you can add them using this form.