Globalization and Multiproduct Firms

Volker Nocke and Stephen Yeaple

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

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.

Keywords: multiproduct firms; trade liberalization; diversification discount; firm heterogeneity; productivity (search for similar items in EconPapers)
JEL-codes: F12 F15 (search for similar items in EconPapers)
Date: 2013-08-25
New Economics Papers: this item is included in nep-bec and nep-cse
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: GLOBALIZATION AND MULTIPRODUCT FIRMS (2014)
Working Paper: Globalization and multiproduct firms (2013)
Working Paper: Globalization and Multiproduct Firms (2013)
Working Paper: Globalization and Multiproduct Firms (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:trf:wpaper:408

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