BEHRENS, Kristian; LAMORGESE, Andrea R.; OTTAVIANO, … - Center for Operations Research and Econometrics (CORE), … - 2005
We extend Krugman's (1980) two-country two-sector model to a setup with arbitrary numbers of countries and sectors. The extended model predicts an adequately defined "home market effect" only after controlling for cross-country differential accessibility through a theory-based linear filter. We...