TY  - RPRT
        AU  - Toulemonde, Eric
        TI  - Home Market Effect versus Multinationals
        PY  - 2007/Jun/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 2829
        UR  - https://www.iza.org/index.php/publications/dp2829
        AB  - We develop a model with two asymmetric countries. Firms choose the number and the location of plants that they operate. The production of each firm increases when trade costs fall. The fall also induces multinationals to repatriate their production into a single country, which is likely to be the large country because of the home market effect. The net effect on total output is favorable in the large country and ambiguous in the small country. We extend the model to endogenize country sizes and we show that in an equilibrium with multinationals only, a rent can be taxed by governments.
        KW  - globalization
KW  - economic geography
KW  - trade costs
KW  - multinational firms
KW  - home market effect
        ER  -