Multi-Product Firms and Flexible Manufacturing in the Global Economy

We present a new model of multi-product firms (MPFs) and flexible manufacturing, and explore its implications in partial and general oligopolistic equilibrium. Globalization affects the scale and scope (or intensive margin and intra-firm extensive margin) of MPFs through a competition effect and a d... Ausführliche Beschreibung

1. Person: ECKEL, CARSTEN
Weitere Personen: NEARY, J. PETER
Quelle: in The Review of Economic Studies Vol. 77, No. 1 (2010), p. 188-217
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Format: Online-Artikel
Sprache: English
Veröffentlicht: 2010
Beschreibung: Online-Ressource
Online Zugang: Volltext
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Anmerkung: Copyright: © 2010 The Review of Economic Studies Ltd.
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520 |a We present a new model of multi-product firms (MPFs) and flexible manufacturing, and explore its implications in partial and general oligopolistic equilibrium. Globalization affects the scale and scope (or intensive margin and intra-firm extensive margin) of MPFs through a competition effect and a demand effect. The model highlights a new source of gains from trade: productivity increases as firms become "leaner and meaner", concentrating on their core competence; but also a new source of losses from trade: product variety may fall. Our results also hold under free entry, which allows in addition for adjustment along the traditional inter-firm extensive margin. 
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