Okubo, Toshihiro; Picard, Pierre M.; Thisse, … - Research Institute for Economics and Business … - 2011
We study how the level of trade costs and the intensity of competition can explain the existence of two-way, one-way or no trade within the same industry. As trade costs decrease from very high to very low values, the economy moves from autarky to a regime of two-way trade, through a regime of...