This paper investigates the market equilibrium and entry location in two interdependent spatial markets. It is first shown that for some international trade problems, an explicit two-market spatial model with a representative firm brings more general results than those obtained with existing approaches. Then, modifying the game, entry location is analyzed and import replacement strategy is shown to be a strong feature of the model. This possible strategy of entry provides an incentive to incumbent firms to establish multi-market production. © 1993.
Schmitt, N. (1993). Equilibria and entry in two interdependent spatial markets. Regional Science and Urban Economics, 23(1), 1–27. https://doi.org/10.1016/0166-0462(93)90026-B