Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
9550987 | European Economic Review | 2005 | 24 Pages |
Abstract
This paper analyses the effects of trade liberalisation on the location of manufacturing firms that are vertically linked and differ in factor intensities. I extend the new economic geography literature, by embedding a model with vertical linkages within a Heckscher-Ohlin framework. I show that lower trade costs can lead to an agglomeration of all upstream and downstream firms in one country, even when they differ in factor intensities. These industrial location patterns do not always lead to factor price convergence; and may result in an increase in returns to both factors in the country where the agglomeration locates.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Mary Amiti,