This paper uses a new economic geography approach to examine the effects of wage subsidy, which is undertake to bolster up the industrial development. This paper also highlights the effects of trade liberalization and international capital mobility. In particular, sector-specific unemployment is introduced in the monopolistically competitive sector of the home country.

Lihong Zhao

Yenhuang Chen

Research Papers in Economics

English

Equilibrium Locations of Vertically Linked

Globalization and the

Imperfect Competition and International Trade:

Increasing Returns and Economic Geography”

Intra-Industry Trade between the Industrial Countries and the Developing World”

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On the Harris-Todaro Model with

Scale Economies, Production Differentiation, and the

Stability of the Mobile-Capital Harris-Todaro Model: Some Further Results”

The Economics of Intra-Industry Trade”

The Minimum Wage, Wage Subsidies,

The Spatial Economy: Cities, Industrial Location and Regional Growth”

Wage Subsidy and Sector-Specific Unemployment: A New Economic Geography Approach