Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/325492 
Year of Publication: 
2025
Series/Report no.: 
Kiel Working Paper No. 2299
Publisher: 
Kiel Institute for the World Economy (IfW Kiel), Kiel
Abstract: 
We study how liberalization and competition affect firms' output and product scope depending on management practices. In a model of multi-product firms, we show that firms with better management practices specialize in fewer products with lower marginal costs. The model predicts that, under increased competition, firms with better management practices are less adversely affected by competition, especially in heterogeneous sectors. Evidence from India's de-reservation policy supports these predictions. Our simulations estimate a 0.29% welfare gain in India from the policy. The same policy could increase welfare by 0.39% in an environment with better management practices, such as the US, highlighting the management practices' role in liberalization outcomes.
Subjects: 
management practices
multi-product firms
de-reservation policy
JEL: 
F61
D24
L25
O12
Document Type: 
Working Paper

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