Munich Personal RePEc Archive

Footloose Capital and Locational Advantage of a Hub

Kikuchi, Toru (2008): Footloose Capital and Locational Advantage of a Hub.

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The purpose of this study is to illustrate, with a simple three-region (located on a line), two-good (homogeneous good/differentiated high-tech products), two-factor (labor/``footloose'' capital) model, how falling transport costs can affect firms' location decisions and trade structure. It is shown that the locational advantage of a central hub is magnified via firms' location decisions.

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