Munich Personal RePEc Archive

Distribution Costs, International Trade and Industrial Location

Kikuchi, Toru (2008): Distribution Costs, International Trade and Industrial Location.

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The purpose of this study is to illustrate, with a simple two-country, two-good, two-factor model, how a technological/regulational improvement in one country's distribution sector can affect firms' location decisions and the nature of the trading equilibrium. It is shown that, through improvements in distribution sector, one country might divert high-tech industries to another country. This effect reduces the incentive to improve distribution sector lower.

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