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- Title
Home-Market and Factor-Endowment Effects in a Gravity Approach.
- Authors
Schumacher, Dieter; Siliverstovs, Boriss
- Abstract
This paper shows how the home-market effect can be estimated in the generalized gravity equation of Bergstrand, taking into account traditional comparative advantage effects arising from differences in factor endowment. The empirical results suggest the presence of significant home-market effects for differentiated goods in many manufacturing industries which may be capital intensive or labour intensive. At the same time, our results suggest that home-market effects can only be detected for data disaggregated at the industry level and not for aggregated data.
- Subjects
MATHEMATICAL models; ECONOMIC geography; FACTOR proportions; COMPARATIVE advantage (International trade); CAPITAL intensive industries; INTERNATIONAL trade; PRODUCT differentiation; ECONOMIC impact
- Publication
Review of World Economics, 2006, Vol 142, Issue 2, p330
- ISSN
1610-2878
- Publication type
Article
- DOI
10.1007/s10290-006-0070-z