The conventional wisdom indicates that firms' optimal locations are sensitive to the modes of product-market competition, leading to a difficulty for firms to make concrete location decisions. This difficulty is especially crucial for the high entry-cost firms. The paper develops an...

This paper constructs a two-dimensional framework to take into consideration both horizontal and vertical differentiation. The focus of the paper is on the impact of vertical (quality) differentiation on the location configuration of firms. It shows that while the principle of minimum...