Large Country Effect, Transaction Cost and Economic Structure
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| Title | Large Country Effect, Transaction Cost and Economic Structure
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| Author | Li Junhua and Ouyang Yao |
| Organization | Center of Large Country Economic Research, Hunan Normal University |
| Email | lijhemail@126.com；ouyangyao008@163.com |
| Key Words | Effect of Large Country; Transaction Costs; Economic Structure; Income Gaps across Countries |
| Abstract | Population size and land area are the two most important natural features of large countries. The existence of the large country effect and the condition of its existing can be inferred from the two natural features. It is showed in this paper that large country effect may indeed exist, but it appears only under some conditions. The per capita incomes has a positive relationship with land area, but a inverted U-shaped connection with population size. Under land area and other conditions given, if the population size of a country is moderately high, the per capita incomes in this country will be higher than that in a small country. However, if population size is too large, the large countries will weaken or reverse its large country effect due to the over-crowded population. It is further showed that the effect of large country will possibly be weakened or reversed due to market transaction cost, differences of economic structure and the lower openness between countries. Obviously, It requires certain conditions to form the effect of large country . The relationship between national scale and the gap between rich and poor is not simply linear. |
| Serial Number | WP1128 |
| Time | 2016-11-15 |
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