Footloose capital, market access, and the geography of regional state aid

Arbeitspapier

The global welfare implications of home market effects in trade models with imperfect competition are little understood. This paper proposes a simple model in which such implications can be easily analyzed. It shows an overall tendency of imperfectly competitive sectors to inefficiently cluster in locations that offer market access advantages. The more so the stronger the market power of firms as well as the intensity of increasing returns to scale and the lower the trade costs. As such features are likely to differ widely across sectors, those results provide theoretical ground to the promotion of regional policies that are also sectorspecific and not only region-specific as currently in the EU.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: HWWA Discussion Paper ; No. 132

Classification and Topics

• Classification: Wirtschaft ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; General Equilibrium and Welfare Economic Analysis of Regional Economies ; Oligopoly and Other Imperfect Markets
• Subject: economic integration ; specialization ; home market effect ; regional disparities ; regional policy ; Wirtschaftsunion ; Neue Außenhandelstheorie ; Direktinvestition ; Standorttheorie ; Regionale Konzentration ; Neue ökonomische Geographie ; Industriestruktur ; Regionale Disparität ; EU-Regionalpolitik ; Landesgröße ; EU-Staaten ; home market effect

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ottaviano, Gianmarco I. P.
• Event: Veröffentlichung
• (who): Hamburg Institute of International Economics (HWWA)
• (where): Hamburg
• (when): 2001

Further information

• Handle: http://hdl.handle.net/10419/19419
• Last update: 10.03.2025, 11:41 AM CET