Firm Heterogeneity and the Localization of Economic Activities

Pamela Bombarda

No 2013-25, THEMA Working Papers from THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise

Abstract: This paper examines how market access strategies, export and FDI, respond to changes in level of integration. Empirical evidence shows that both firm exports and multinational activity are affected by trade liberalization episode. To account for the strong positive correlation between export and FDI, we develop a general equilibrium model that features firm heterogeneity, trade and FDI with final and intermediate products. Different spatial networks 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 inside and outside the PTA area.

Keywords: Heterogeneous firms; PTA; Spatial networks; Intrafirm trade (search for similar items in EconPapers)
JEL-codes: F12 F15 F23 R12 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-cse, nep-geo, nep-int and nep-ure
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http://thema.u-cergy.fr/IMG/documents/2013-25.pdf (application/pdf)

Related works:
Journal Article: Firm heterogeneity and the localization of economic activities (2016)
Working Paper: Firm Heterogeneity and the Localization of Economic Activities (2014)
Working Paper: Firm Heterogeneity and the Localization of Economic Activities (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ema:worpap:2013-25

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