Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/34432
Authors: 
Toulemonde, Eric
Year of Publication: 
2007
Series/Report no.: 
IZA Discussion Papers 2829
Abstract: 
We develop a model with two asymmetric countries. Firms choose the number and the location of plants that they operate. The production of each firm increases when trade costs fall. The fall also induces multinationals to repatriate their production into a single country, which is likely to be the large country because of the home market effect. The net effect on total output is favorable in the large country and ambiguous in the small country. We extend the model to endogenize country sizes and we show that in an equilibrium with multinationals only, a rent can be taxed by governments.
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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