Two-way trade in (almost) homogenous products has ambiguous welfare effects if entry is restricted. We examine Swedish imports of bottled water to investigate whether transport cost losses from trade outweigh the partial equilibrium gains from trade (stronger competition and more brands to...

This paper compares the effect of economic integration on industry location for a small country that goes ahead with an integration process, such as the European, and a country adopting a wait and see strategy. Theoretical results, derived from a three-region new economic geography model, are...