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Distribution Costs, International Trade and Industrial Location

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  • Kikuchi, Toru

Abstract

The purpose of this study is to illustrate, with a simple two-country, two-good, two-factor model, how a technological/regulational improvement in one country's distribution sector can affect firms' location decisions and the nature of the trading equilibrium. It is shown that, through improvements in distribution sector, one country might divert high-tech industries to another country. This effect reduces the incentive to improve distribution sector lower.

Suggested Citation

  • Kikuchi, Toru, 2008. "Distribution Costs, International Trade and Industrial Location," MPRA Paper 9160, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:9160
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    References listed on IDEAS

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    1. Martin, Philippe & I.P. Ottaviano, Gianmarco, 1999. "Growing locations: Industry location in a model of endogenous growth," European Economic Review, Elsevier, vol. 43(2), pages 281-302, February.
    2. Donald J. Rousslang & Theodore To, 1993. "Domestic Trade and Transportation Costs as Barriers to International Trade," Canadian Journal of Economics, Canadian Economics Association, vol. 26(1), pages 208-221, February.
    3. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    4. Makoto Yano & Fumio Dei, 2003. "Trade, Vertical Production Chain, and Competition Policy," Review of International Economics, Wiley Blackwell, vol. 11(2), pages 237-252, May.
    5. Limao, Nuno & Venables, Anthony J., 1999. "Infrastructure, geographical disadvantage, and transport costs," Policy Research Working Paper Series 2257, The World Bank.
    6. Bandyopadhyay, Usree, 1998. "Distribution Costs and International Trade: A Ricardian Model," Review of International Economics, Wiley Blackwell, vol. 6(1), pages 164-178, February.
    7. Toru Kikuchi, 2005. "Interconnected communications networks and home market effects," Canadian Journal of Economics, Canadian Economics Association, vol. 38(3), pages 870-882, August.
    8. Martin, Philippe & Rogers, Carol Ann, 1995. "Industrial location and public infrastructure," Journal of International Economics, Elsevier, vol. 39(3-4), pages 335-351, November.
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    Cited by:

    1. Wataru Johdo, 2013. "Asymmetric inter-regional transportation costs, industrial location and growth," Economics Bulletin, AccessEcon, vol. 33(2), pages 1082-1090.

    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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