Articles

Input substitutability, trade costs and location

T. K. MICHALSKI

Economics Letters

octobre 2012, vol. 117, n°1, pp.57-59

Départements : Economie et Sciences de la décision, GREGHEC (CNRS)


Constant unit manufacturing costs are lower (higher) in high wage North when inputs are i) tradeable, ii) country-specific and iii) the elasticity of substitution between them is below (above) one. A two-country model of firm entry/location is considered.


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