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dc.contributor.authorFelbermayr, Gabriel J.en_US
dc.contributor.authorJung, Benjaminen_US
dc.date.accessioned2012-02-14en_US
dc.date.accessioned2012-02-15T17:38:31Z-
dc.date.available2012-02-15T17:38:31Z-
dc.date.issued2011en_US
dc.identifier.urihttp://hdl.handle.net/10419/55358-
dc.description.abstractIncreasing-returns-to-scale imperfect competition trade models predict a more than proportionate relationship between the larger country's share in world endowments and its share in producing firms: the so called home market effect (HME). While this result plays a key role in empirical testing, its theoretical foundation typically posits a linear, friction-free and perfectly competitive outside sector. Replacing this assumption with firm heterogeneity and Melitz (2003) type selection-into-exporting, we demonstrate the existence of a weak and a strong HME. The HMEs are generally non-linear; they are magnified by lower trade costs or more pronounced productivity dispersion. The weak version of the HME continues to hold for general sampling distributions and if the conventional sorting condition fails. In terms of demand shares, a HME holds if demand shocks are due to endowment shocks but reverses in the case of productivity shocks. Finally and in contrast to the model with an outside sector, trade liberalization leads to convergence of real per capita income.en_US
dc.language.isoengen_US
dc.publisherCESifo Münchenen_US
dc.relation.ispartofseriesCESifo working paper: Trade Policy 3695en_US
dc.subject.jelF12en_US
dc.subject.jelR12en_US
dc.subject.ddc330en_US
dc.subject.keywordhome market effecten_US
dc.subject.keywordmonopolistic competitionen_US
dc.subject.keywordheterogeneous firmsen_US
dc.subject.keywordeconomic geographyen_US
dc.subject.stwAußenwirtschaften_US
dc.subject.stwAußenhandelsliberalisierungen_US
dc.subject.stwWirtschaftsstrukturen_US
dc.subject.stwAußenhandelsstrukturen_US
dc.subject.stwMonopolistischer Wettbewerben_US
dc.subject.stwWirtschaftsgeographieen_US
dc.subject.stwTheorieen_US
dc.titleHome market effects and the single-sector Melitz modelen_US
dc.typeWorking Paperen_US
dc.identifier.ppn68522161Xen_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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