Purchase - $38.00

Interconnected Communications Networks and Home Market Effects

13 Pages Posted: 8 Aug 2005  

Toru Kikuchi

Kobe University - Faculty of Economics

Abstract

This study develops a model of trade that highlights the effects of the interconnection of country-specific communications networks as a driving force behind trade in high-tech products with positive transport costs. By constructing a two-country model of monopolistic competition with two production factors, it is shown that the locational decisions of firms may magnify the influence of interconnected networks. In a reversal of the standard home market effects, the abundance of unskilled labour in the developing countries can attract high-tech firms from the developed countries.

JEL Classification: D43, F12, L13

Suggested Citation

Kikuchi, Toru, Interconnected Communications Networks and Home Market Effects. Canadian Journal of Economics, Vol. 38, No. 3, pp. 870-882, August 2005. Available at SSRN: https://ssrn.com/abstract=772992

Toru Kikuchi (Contact Author)

Kobe University - Faculty of Economics ( email )

2-1, Rokkodai
Nada-Ku
Kobe, Hyogo, 657-8501
Japan

Paper statistics

Downloads
11
Abstract Views
431