Quality Advantage And Trade：Home Market Effects Revisited

• Main Authors: Jia-Yu Chang, 張佳煜
• Other Authors: Deng-Shing Huang
• Format: Others
• Language: en_US
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/45846838111375557565

碩士 === 輔仁大學 === 經濟學研究所 === 100 === According to the home market effect first proposed by Krugman (1980), free trade tends to shrink the market share of the smaller economy in differentiated goods markets. By considering quality differentiation of products between the large and the small countries, we show that the home market effect will be offset or even dominated if the small economy has a better quality technology than its larger trading partner.