Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/22169
Authors: 
Südekum, Jens
Year of Publication: 
2005
Series/Report no.: 
CeGE discussion paper 42
Abstract: 
It is uncertain whether the fundamental ?home market effect? (HME) generalizes from a two-country model to a more realistic setting with multiple countries. We present a three-country version of the seminal model by Krugman (1980) and analyse under which circumstances the HME is present once third country effects are taken into account. We show that both expenditure shifts and exogenous enlargements among foreign countries can rule out the HME.
Subjects: 
New trade theory
home market effect
hub effect
JEL: 
R12
F14
F12
Document Type: 
Working Paper

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