Saito, Hisamitsu; Gopinath, Munisamy; Wu, JunJie - In: Canadian Journal of Economics 44 (2011) 2, pp. 541-560
In this study, we develop an economic model to examine agglomeration of heterogeneous firms following trade liberalization. In a closed economy, we show that high-productivity firms are more likely to agglomerate because they benefit more from agglomeration than their low-productivity...