TY  - JOUR
AU  - Davis,Donald R.
AU  - Weinstein,David E.
TI  - Market Access, Economic Geography, and Comparative Advantage:  An       Empirical Assessment
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6787
PY  - 1998
Y2  - November 1998
UR  - http://www.nber.org/papers/w6787
L1  - http://www.nber.org/papers/w6787.pdf
N1  - Author contact info:
Donald R. Davis
Columbia University, Department of Economics
1038 Intl. Affairs Building
420 West 118th St.
New York, NY 10027
Tel: 212/854-4037
Fax: 212/854-8059
E-Mail: drd28@columbia.edu

David Weinstein
Columbia University, Department of Economics
420 W. 118th Street
MC 3308
New York, NY  10027
Tel: 212/854-6880
Fax: 212/854-8059
E-Mail: dew35@columbia.edu
AB  - The increasing returns revolution in trade is incomplete in an important respect   there exists no compelling empirical demonstration of the role of increasing returns in determining production and trade structure. One reason is that trade patterns of the canonical increasing returns models are a consequence simply of specialization, which all theories permit. Krugman (1980) shows that increasing returns models with costs of trade economic geography   do allow a simple test: home market effects of demand on production. Davis and Weinstein (1996) reject the simple Krugman (1980) model on OECD data. Here we pair the model with a richer geography structure and find evidence of the importance of increasing returns, in combination with comparative advantage, in affecting OECD manufacturing production structure. The results underscore the importance of market access in implementing models of economic geography.
ER  -