Input substitutability, trade costs and location

Tomasz Michalski

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Abstract: Constant unit manufacturing costs are lower (higher) in high wage North when inputs are (i) tradeable, (ii) country-specific and (iii) the elasticity of substitution between them is below (above) one. A two-country model of firm entry/location is considered.

Keywords: MANUFACTURING industries; COST analysis; ELASTICITY (Economics); SUBSTITUTION (Economics); MARKET entry; ECONOMIC models; INDUSTRIAL location; WAGES (search for similar items in EconPapers)
Date: 2012-10
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Published in Economics Letters, 2012, 117 (1), pp.57-59. ⟨10.1016/j.econlet.2012.04.105⟩

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Journal Article: Input substitutability, trade costs and location (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00738265

DOI: 10.1016/j.econlet.2012.04.105

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