اندازه بازار و محل صنعت: کالاهای معامله در مقابل کالاهای غیر معامله ای

We investigate the importance of market size as a determinant for industrial location patterns. In order to focus on a broad range of sectors, including services, both traded and non-traded goods are taken into consideration. In our model, traded goods industries always exhibit a ‘home market effect’ (HME), whereas the existence of such an effect for non-traded goods crucially hinges on the degree of product differentiation. High degrees of product differentiation generally support a HME, whereas a reverse HME may arise when products are sufficiently close substitutes. Our results are in accord with the observed existence of a market size dependent ‘functional hierarchy’, both within and between countries.

In recent years, spatial questions have attracted a great deal of attention, both from a theoretical and an applied point of view. In particular, there has been a significant increase in the number of contributions related to the so-called ‘home market effect’ (henceforth, HME) (Krugman [26]; Helpman and Krugman [23]). The HME emphasizes the central role of market size as an important determinant of industry location and trade patterns in sectors characterized by some form of imperfect competition (Feenstra et al. [15]; Head et al. [22]). More precisely, the main finding of the HME literature is the existence of a disproportionate causation from demand to supply. Increases in local market size map into more than proportional increases in local industry size, thus suggesting that larger regions host a disproportionate share of the imperfectly competitive sectors and are net exporters of the goods they produce.

We have shown that, despite increasing returns to scale, product differentiation, imperfect competition, and the absence of national product differentiation, some industries may exhibit a reverse home market effect when their output is not traded across regions and varieties are sufficiently close substitutes. This result is sufficient to show that the structure of interregional trade is of fundamental importance in explaining observed patterns of industrial location. In particular, great caution is needed when trying to assess the importance of market size for some service industries, since the locational determinants of these industries probably differ from those of the manufacturing sector.