Creator: Holmes, Thomas J. and Stevens, John J. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 304 Abstract:
Does national market size matter for industrial structure? Round One (Krugman) answered in the affirmative: Home market effects matter. Round Two (Davis) refuted this, arguing that an assumption of convenience—transport costs only for the differentiated goods—conveniently obtained the result. In Round Three we relax another persistent assumption of convenience—two industry types differentiated only by the degree of scale economies—and find that market size reemerges as a relevant force in determining industrial structure.
Stichwort: Scale economies, Market size, and Home market effects Fach: O10 - Economic Development: General, R10 - General Regional Economics (includes Regional Data), and F00 - International Economics: General