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Article Dans Une Revue Review of International Economics Année : 2010

Should small countries fear deindustrialization ?

Résumé

Will small countries deindustrialize when opening up to trade with large countries? Donald Davis (1998) shows that for the home market effect to lead to deindustrialization of small countries, trade costs for homogeneous goods must be sufficiently smaller than trade costs in differentiated goods, a condition which is not supported by empirical evidence. We show that if differentiated goods production uses tradable inputs small countries can become deindustrialized when trading with a sufficiently large country and if trade costs are low.

Dates et versions

hal-00521799 , version 1 (28-09-2010)

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Citer

Ai-Ting Goh, Tomasz Michalski. Should small countries fear deindustrialization ?. Review of International Economics, 2010, 18 (4), pp.607-617. ⟨10.1111/j.1467-9396.2010.00899.x⟩. ⟨hal-00521799⟩

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