Trade, market size, and industrial structure: revisiting the home‐market effect

Abstract

Abstract. This paper shows that the issues in the recent discussion over the ‘home‐market effects’ are more complicated than previously thought. It is shown that, in general, market size matters for industrial structure even when both the homogeneous and the differentiated goods face transport costs. The home‐market effect for production structure can arise, disappear, or even reverse in sign. The analysis shall change a common perception about de‐industrialization of (small) economies and may also have important implications for the empirical research strategies in this area. JEL classification: F12, L1

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 63 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.