This paper examines the relationship between resource development and industrialization. When transport costs are high, the region with a more valuable natural resource enjoys a higher welfare than the other region. However, as transport costs decrease, firms begin to move out of the region,...

In the literature of new trade theory, most papers study the industrial location by imposing the assumption of free transportation in the agricultural sector. This paper explicitly incorporates arbitrary transport costs in both the manufacturing and the agricultural sectors into the...