Despite low levels of formal trade barriers and recent reductions in global communication and shipping costs, firms still command a disproportionately large market share in their home countries. This column examines home market advantage in the car industry. The results suggest that preference for own-country brands is an important feature of trade and multinational production that is underappreciated in the academic literature.
Kerem Cosar, Paul Grieco, Shengyu Li, Felix Tintelnot, 07 November 2015
Johannes Van Biesebroeck, 10 February 2009
Following the US bailout of the automotive industry, Canada is now bailing out its own auto firms, lest they risk southward migration. However, this column shows that this most recent action only continues a long history of lavish subsidies for the auto industry. Are governments giving away money for nothing?
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