- 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., Tourism, amenities, and welfare in an urban setting.
Abstract: In this paper we set up a general equilibrium model of small open cities that are a tourist destination
to study the impact of tourism on prices, factor allocations across sectors, endogenous amenities, and
welfare. In our model tourism has two main effects on the city economy: first, it increases prices; second,
it increases the number of varieties supplied by the non-tradable sector (an endogenous consumption
amenity). We find that tourism may hurt the resident population: with unequal land endowments,
poorer residents are hurt by tourism because the rise in city prices offsets the positive impact on the
urban consumption amenity. Along with several other extensions, we study the interplay of historical
(exogenous) amenities, tourism and residents welfare in a system of two cities.
Presented at the
11th Meeting of the Urban Economics Association, Minneapolis.