Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/31977
Authors: 
Eckel, Carsten
Year of Publication: 
2003
Series/Report no.: 
CeGE Discussion Paper 20
Abstract: 
The relationship between market integration and the degree of specialization plays a key role in many areas of economics. In contrast to previous studies, we illustrate that globalization does not necessarily lead to specialization. The analysis is conducted in an extended Dixit-Stiglitz- Ethier framework. Whether globalization leads to specialization or to more integrated production structures depends on characteristics of the cost function and on firm behavior. By comparing these changes to the optimal degree of specialization we show that globalization can reduce the efficiency of the industrial structure.
Subjects: 
Fragmentation
Specialization
Market Integration
Globalization
Vertical Equilibrium
Economies of Scale
JEL: 
F12
L11
L22
Document Type: 
Working Paper

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