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Footloose Capital and the Locational Advantage of a Hub

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  • Toru Kikuchi

    (Kobe University)

Abstract

The purpose of this study is to illustrate, with a simple three-region (located on a line), two-good (homogeneous good/differentiated high-tech products), two-factor (labor/"footloose" capital) model, how falling transport costs can affect firms' location decisions and trade structure. It is shown that the locational advantage of a central hub is magnified via firms'' location decisions.

Suggested Citation

  • Toru Kikuchi, 2008. "Footloose Capital and the Locational Advantage of a Hub," Economics Bulletin, AccessEcon, vol. 6(43), pages 1-9.
    • Handle: RePEc:ebl:ecbull:eb-08f10026
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    References listed on IDEAS

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    More about this item

    Keywords

    Footloose Capital Hub Transport Costs;

    JEL classification:

    • F1 - International Economics - - Trade

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