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      • SCOPUSKCI등재

        Firm Location, Trade and Economic Integrantion

        Andaluz, Joaquin,Gil, Agustin 세종대학교 국제경제연구소 2002 Journal of Economic Integration Vol.17 No.4

        The aim of this paper is to analyse how a process of economic integration between two adjacent countries with different transport costs(different levels of development) affects firms' decisions on location and prices. Considering the situation where one firm is located in each country and manufactures a product that is imported by the more developed country, we find that when there are barriers to trade one of the firms tends to locate on the common frontier and the other at the far extreme. By contrast, with full economic integration, both firms tend to maximise differentiation, locating themselves at the non-neighbouring extremes, which leads to higher prices and profits. Therefore, the form located in the more developed country increases its market share.

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        Firm Location, Trade and Economic Integration

        ( Joaquin Andaluz ),( Agustin Gil ) 세종대학교 경제통합연구소 (구 세종대학교 국제경제연구소) 2002 Journal of Economic Integration Vol.17 No.4

        The aim of this paper is to analyse how a process of economic integration between two adjacent countries with different transport costs (different levels of development) affects firms` decisions on location and prices. Considering the situation where one firm is located in each country and manufactures a product that is imported by the more developed country, we find that when there are barriers to trade one of the firms tends to locate on the common frontier and the other at the far extreme. By contrast, with full economic integration, both firms tend to maximise differentiation, locating themselves at the non-neighbouring extremes, which leads to higher prices and profits. Therefore, the firm located in the more developed country increases its market share.

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