Economic Geography with Tariff Competition

Chao-cheng Mai, Shin-Kun Peng () and Takatoshi Tabuchi
Additional contact information
Chao-cheng Mai: Department of Industrial Economics, Tamkang University and Academia Sinica

No CIRJE-F-435, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: A simple two-country model of economic geography is constructed in order to examine the effect of tariff competition on the spatial distribution of manufacturing activities as well as on welfare. We show that when the transport cost is sufficiently small, tariff competition with firm migration leads to a core-periphery economy, where one of the two countries imposes no tariff in Nash equilibrium. We also show that when the transport cost is sufficiently large, tariff competition harms the welfare of the two countries, implying that each country is better off by mutually binding agreement of free trade.

Pages: 19pages
Date: 2006-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.cirje.e.u-tokyo.ac.jp/research/dp/2006/2006cf435.pdf (application/pdf)

Related works:
Journal Article: Economic geography with tariff competition (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:tky:fseres:2006cf435

Access Statistics for this paper

More papers in CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo Contact information at EDIRC.
Bibliographic data for series maintained by CIRJE administrative office ().