This paper examines the relationship between resource development and industrialization. When transport costs are high, the region with a more valuable natural resource offers a higher welfare than the other region. However, when transport costs decrease, firms begin to move out of the region,...

Pollution-intensive industries are generally characterized by imperfect competition, increasing returns to scale and large transportation costs. We investigate two countries, N and S, each with two sectors. Manufacturing generates cross-border pollution which reduces cross-setoral production in...