Economic geography with tariff competition

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Title:	Economic geography with tariff competition
Authors:	Mai, Chao-Cheng;Peng, Shin-Kun;Tabuchi, Takatoshi
Contributors:	淡江大學產業經濟學系
Keywords:	Trade liberalization;Tariff competition;Economic geography;Core-periphery;Trade costs
Date:	2008-09
Issue Date:	2011-09-29 10:55:05 (UTC+8)
Publisher:	Amsterdam: Elsevier BV * North-Holland
Abstract:	A simple two-country model of economic geography is constructed in order to examine the effect of tariff competition on the spatial distribution of manufacturing activities as well as on welfare. We show that when the transport cost is small, tariff competition with firm migration leads to a core-periphery economy, where one of the two countries imposes no tariff in Nash equilibrium. We also show that when the transport cost is sufficiently large, both countries impose a positive tariff, which decreases the welfare of both countries.
Relation:	Regional Science and Urban Economics 38(5), pp.478-486
DOI:	10.1016/j.regsciurbeco.2008.05.008
Appears in Collections:	[Graduate Institute & Department of Industrial Economics] Journal Article

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