This paper develops a general-equilibrium model which features the Home Market Effect and land use for production in the sector of increasing returns to scale. The land rent in the larger region is higher, meanwhile, the larger region holds more-than-proportionate share of firms, the so called...

This paper builds a simple three-country model with different market sizes and non-constant wages. We shed light on the evolution patterns of wages in middlesized countries in the process of trade liberalization. We analytically disclose that, while the wage inequality between the large and the...

We investigate the issue of offshoring in a model of two countries and one sector of increasing returns to scale. Our model uncovers that in a setting of footloose capital, offshoring occurs and evolves in an inverted-U pattern when transport costs decline. This result can explain China's...

This paper investigates how the interactions between product differentiation, transport costs and urban costs determine spatial inequality in a general-equilibrium model. We shed light on the interrelation between different definitions of home market effect (HME) in literature. While the wages...

This paper explores how the interaction between firm heterogeneity, urban costs and transport costs determines spatial configuration across regions within a simple general-equilibrium model. We spot light on how firm heterogeneity affects the centrifugal and centripetal forces and reshapes the...