On the development strategy of countries of intermediate size-An analysis of heterogeneous firms in a multi-region framework

Rikard Forslid, Toshihiro Okubo

研究成果: Article査読

7 被引用数 (Scopus)

抄録

This paper compares two policies: trade cost reduction and firm relocation cost reduction using a three-country version of a heterogeneous-firms geography and trade model, where the three countries have different market (population) sizes. We show how the effects of the two policies differ, in particular for the country of intermediate size. Unless the intermediate country is very small, in a relative sense, it will gain industry when relocation costs are reduced, but lose industry when trade costs are reduced. The smallest country loses industry in both cases, but only experiences lower welfare in the case of lower relocation costs. Thus, the ranking of the policies from the point of view of the two small and intermediate countries tends to be the opposite.

本文言語English
ページ(範囲)747-756
ページ数10
ジャーナルEuropean Economic Review
56
4
DOI
出版ステータスPublished - 2012 5

ASJC Scopus subject areas

  • 財務
  • 経済学、計量経済学

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