
Abstract
We present an international trade model with multiproduct firms. Firms are heterogeneously endowed with two types of capabilities that jointly determine the trade-off within firms between managing a large portfolio of products and producing at low marginal cost. The model can explain many of the documented cross-sectional correlations in firm performance measures, including why larger firms are more productive and more diversified, and yet more diversified firms trade at a discount. Globalization is shown to induce heterogeneous responses across firms in terms of scope and productivity, some of which are consistent with existing empirical work, while others are potentially testable.
Item Type: | Paper |
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Form of publication: | Preprint |
Keywords: | multiproduct firms, trade liberalization, diversification discount, firm heterogeneity, productivity |
Faculties: | Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems > C5 - Wettbewerbspolitik als Steuerung von Wettbewerbsprozessen |
Subjects: | 300 Social sciences > 330 Economics |
JEL Classification: | F12, F15 |
URN: | urn:nbn:de:bvb:19-epub-17232-9 |
Language: | English |
Item ID: | 17232 |
Date Deposited: | 09. Oct 2013, 07:07 |
Last Modified: | 04. Nov 2020, 12:59 |