Globalization and multiproduct firms

• Autores: Volker Nocke, Stephen Yeaple
• Localización: International economic review, ISSN-e 1468-2354, Vol. 55, Nº. 4, 2014, págs. 993-1018
• Idioma: inglés
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• Resumen

  • 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, whereas others are potentially testable.