Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129552
Authors: 
Nocke, Volker
Yeaple, Stephen
Year of Publication: 
2013
Series/Report no.: 
Working Paper Series, Department of Economics, University of Mannheim 13-10
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.
Subjects: 
multiproduct firms
trade liberalization
diversification discount
firm heterogeneity
productivity
JEL: 
F12
F15
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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