The "home market effect" (HME) is an essential topic of the new trade theory. Assuming the transport costs only for the manufacturing goods, Krugman (1980) shows that the country with bigger market size is a net exporter. The assumption of free transport of the agricultural good was shown...

This note explores the determinants of trade patterns by extending a Chamberlinian-Ricardian monopolistic competition trade model to have a larger number of industries as did Dornbush, Fischer and Samuelson (1977). It will be shown that the degree of cross-country technical differences among...