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...

Asymptotic stability of equilibrium is often difficult to know when the number of variables exceeds four, since all eigenvalues of the Jacobian matrix are not analytically solvable. However, we obtain stability conditions for a general class of migration dynamics without computing eigenvalues....

This paper theoretically and empirically explores the Linder conjecture (the home market effect (HME) in terms of trade pattern) in the environmental sector. Using a general-equilibrium model for a two-country two-sector economy, we demonstrate the existence of a strong/weak HME and the crucial...

Arbitration is frequently utilized to settle disputes. Much research has focused on the properties of final-offer arbitration (FOA) relative to conventional arbitration. Both mechanisms should encourage settlement in standard environments, but previous empirical work finds that impasses remain...

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...

Bearing in mind that developing countries have less capital and less advanced technologies, this paper investigates the joint impact of two different kinds of first-nature forces, Ricardian comparative advantage and the Heckscher-Ohlin advantage, and the second-nature forces on economic activity...