In the literature of new trade theory, most studies have dealt with industrial location by imposing an assumption of free transportation in the agricultural sector. We explicitly incorporate arbitrary transport costs in both the manufacturing and agricultural sectors into the...

This paper revisits the home market effect (HME) without any homogeneous good by reconstructing the footloose capital model. This simple model analytically reproduces some typical results scattered in the existing literature, and also provides new insights. Firstly, we derive both spatial...