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...

In the literature of new trade theory, most studies have dealt with industrial location by imposing an assumption of free transportation in the agricultural sector. We explicitly incorporate arbitrary transport costs in both the manufacturing and agricultural sectors into the...

We investigate the issue of offshoring in a model of two countries and one sector of increasing returns to scale. Our model uncovers that in a setting of footloose capital, offshoring occurs and evolves in an inverted-U pattern when transport costs decline. This result can explain China's...