The Home Market, Trade, and Industrial Structure

Donald R. Davis ()

Working Papers from Harvard - Institute for International Development

Abstract: Does national market size matter for industrial structure? This has been suggested by theoretical work on "home market" effects, as in Krugman (1980, 1995). In this paper, I show that what previously was regarded as an assumption of convenience - transport costs only for the differentiated goods - matters a great deal. In a focal case in which differentiated and homogeneous goods have identical transport costs, the home market effect disappears.

Keywords: TRANSPORT; GEOGRAPHY; INDUSTRIAL STRUCTURE (search for similar items in EconPapers)
JEL-codes: F1 O1 R1 (search for similar items in EconPapers)
Date: 1997

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Working Paper: The Home Market, Trade, and Industrial Structure (1997)
Working Paper: The home market, trade, and industrial structure (1997)
Working Paper: The Home Market, Trade and Industrial Structure (1997)
Journal Article: The Home Market, Trade, and Industrial Structure (1998)
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