The regional specialization via differences in transport costs are observed in Japanese manufacturing industries. Concretely, industries with high transport costs for their products, such as iron and steel, petroleum and coal products, remained close to the core region while industries with low...

The "home market effect" (HME) is an essential topic of the new trade theory. Assuming the transport costs only for the manufacturing goods, Krugman (1980) shows that the country with bigger market size is a net exporter. The assumption of free transport of the agricultural good was shown...