The spatial selection of heterogeneous firms
Toshihiro Okubo,
Pierre Picard and
Jacques Thisse
Post-Print from HAL
Abstract:
We show that heterogeneous firms choose different locations in response to market integration. Specifically, decreasing trade costs lead to the gradual agglomeration of efficient firms in the larger country where they have access to a bigger pool of consumers. In contrast, high-cost firms seek protection against competition from efficient firms by locating in the smaller country. However, when the spatial separation of markets ceases to be a sufficient protection against foreign competition, high-cost firms choose to set up in the larger market. Hence, the relationship between economic integration and international productivity gap first increases and then decreases with market integration.
Keywords: Firm heterogeneity; Spatial selection; Trade liberalization; Economic geography (search for similar items in EconPapers)
Date: 2010-11
References: Add references at CitEc
Citations: View citations in EconPapers (50)
Published in Journal of International Economics, 2010, 82 (2), pp.230-237. ⟨10.1016/j.jinteco.2010.07.003⟩
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Related works:
Journal Article: The spatial selection of heterogeneous firms (2010) 
Working Paper: The spatial selection of heterogeneous firms (2010)
Working Paper: The spatial selection of heterogeneous firms (2010)
Working Paper: The Spatial Selection of Heterogeneous Firms (2008) 
Working Paper: The spatial selection of heterogeneous firms (2008) 
Working Paper: The spatial selection of heterogeneous firms (2008) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00754412
DOI: 10.1016/j.jinteco.2010.07.003
Access Statistics for this paper
More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD (hal@ccsd.cnrs.fr).