This paper aims to fill the gap between theoretical and empirical studies of home market effects (HMEs). On one hand, empirical studies on the price aspect of HMEs -- that wages are higher in larger markets -- are supportive, but studies on the quantity aspect -- that the firm share in the...

To explain the spatial selection of vertically di fferentiated firms, this paper incorporates heterogeneous preferences and heterogeneous quality productions into a framework of the footloose capital model, in which labor is immobile. In two regions with identical population size, when trade...

type="main" xml:lang="en" <p>This paper incorporates heterogeneous demand elasticities and the quality/skill complementarity of production in a footloose capital model in order to explain the spatial selection of firms with differentiated quality. We find that when trade becomes freer, high-quality...</p>

To examine the effects of heterogeneous labor mobility on the distribution of industries and analyze the subsidy policy for attracting firms, this paper develops an analytically solvable new economic geography model, which incorporates heterogeneous locational preferences and an intra-industry...

This study quantifies the uneven welfare gains from trade between firm owners and workers in a multi-country model of monopolistic competition under a demand system of constant elasticity of substitution (CES). An agent decides to start up her own firm or to be employed as a worker according to...

The World Trade Organization (WTO) and preferential trade agreements (PTA) are key factors in international trade liberalization. However, their relative effects on trade flows are controversial (ranging from 16 percent to 277 percent), depending on whether the endogeneity of these two variables...

Count regression models are widely used in many scientific disciplines. Nevertheless, some binary explanatory variables could be endogenous during the process of generating the count dependent variable, thus simultaneous equations bias arises. Except for some numerically intensive...