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Title:Home Market and Traditional Effects on Comparative Advantage in a Gravity Approach PDF Logo
Authors:Schumacher, Dieter
Issue Date:2003
Series/Report no.:DIW-Diskussionspapiere 344
Abstract:Policy makers in "small" countries facing trade liberalisation have become concerned with the potential loss of manufacturing employment and output to "large" economies in the presence of economies of scale in production and international transport costs. This paper offers a methodology to estimate the "home market" effect for numerous industries, after accounting for transport costs and traditional comparative advantage effects. The empirical results suggest significant home-market effects in many manufacturing industries which may be capital intensive or labour intensive.
Subjects:Home-market effect
comparative advantage
bilateral trade
factor endowment
gravity model
JEL:F12
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des DIW
DIW-Diskussionspapiere

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