Market size in globalization

• 成果类型: Article
• 署名作者: Kato, Hayato; Okubo, Toshihiro
• 署名单位: Keio University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2017.12.003
• 发表日期: 2018
• 页码: 34-60
• 关键词: agglomeration; Market size; Middle-sized country; Non-constant wages; Industry/welfare maintaining policy

摘要

A salient feature of the current globalization is a loss of manufacturing in developed countries and rapid industrialization in middle-sized developing countries. This paper aims to construct a simple three-country trade and geography model with different market sizes and non-constant wage rates. The large country fosters industrial agglomeration (geographical concentration) in the early stage of globalization, but loses manufacturing in the later stage of globalization. When losing manufacturing, the large country might be worse off. Thus, the large country might have an incentive to implement welfare-maintaining policies to prevent a loss of manufacturing. All of these results can be explained by market sizes. (C) 2017 Elsevier B.V. All rights reserved.