- Minerva G.A., The proximity-concentration trade-off with multiproduct multinational firms.
Abstract: I study the proximity-concentration trade-off faced by two multiproduct multinational firms that operate in two
countries under horizontal product differentiation. In this context, characterized by two-way trade and FDI, the trade-off regulates
the number of domestic affiliates (concentration) against the number of foreign affiliates (proximity). I show how multinationals'
market shares and markups react to changes in trade and investment frictions, and in the degree of product substitutability.
Under plausible parameters restrictions, the model is consistent with the stylized fact that, in U.S. and Japan, the number
of foreign affiliates is inversely related to the market share held by multinationals in their domestic market.
Presented at the 9th FIW Research Conference,
University of Vienna.
- Lanzara G., Minerva G.A., The welfare impact of tourism in an urban setting.
Abstract: This paper builds a general equilibrium model of cities that are also a tourists' destination. We find that residents
welfare is positively affected by the inflow of tourists as far as the elasticity of capital supply used in the retail sector is greater
than zero: the higher the elasticity of capital, the higher the welfare gains. Thanks to this mechanism, in the two-city setting, welfare
of residents is increasing in the level of amenities enjoyed by tourists. Assuming that the retail sector is characterized by monopolistic
competition, in the case where product differentiation is sufficiently high we find that one city emerges as a tourism hub and attracts all tourists.
Presented at the
11th Meeting of the Urban Economics Association, Minneapolis.