Spatial discrimination, nations' size and transportation costs

Kai Andree ()

No 101, Volkswirtschaftliche Diskussionsbeiträge from Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät

Abstract: In this paper we develop a spatial Cournot trade model with two unequally sized countries, using the geographical interpretation of the Hotelling line. We analyze the trade and welfare effects of international trade between these two countries. The welfare analysis indicates that in this framework the large country benefits from free trade and the small country may be hurt by opening to trade. This finding is contrary to the results of Shachmurove and Spiegel (1995) as well as Tharakan and Thisse (2002), who use related models to analyze size effects in international trade, where the small country usually gains from trade and the large country may lose.

Date: 2010-09
New Economics Papers: this item is included in nep-geo, nep-int and nep-opm
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http://nbn-resolving.de/urn:nbn:de:kobv:517-opus-48117 (application/pdf)

Related works:
Journal Article: Spatial Discrimination, Nations' Size and Transportation Costs (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:pot:vwldis:101

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