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Author: Rikard Forslid
Publisher:
ISBN:
Category : Economic geography
Languages : en
Pages : 24
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Book Description
In this paper we study how trade liberalization affects the location and the product scope of firms. We find that the largest and most productive multiproduct firms concentrate to the larger market as a result of trade liberalization. In the presence of relocation costs, we also find that these firms will expand their product range in the larger market while firms in the smaller market will contract their product scope. These effects are magnified with firm-level productivity. The findings are consistent with Japanese manufacturing firm data.
Author: Rikard Forslid
Publisher:
ISBN:
Category : Economic geography
Languages : en
Pages : 24
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Book Description
In this paper we study how trade liberalization affects the location and the product scope of firms. We find that the largest and most productive multiproduct firms concentrate to the larger market as a result of trade liberalization. In the presence of relocation costs, we also find that these firms will expand their product range in the larger market while firms in the smaller market will contract their product scope. These effects are magnified with firm-level productivity. The findings are consistent with Japanese manufacturing firm data.
Author: Marcia Schafgans
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author:
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author: Hong Ma
Publisher:
ISBN:
Category :
Languages : en
Pages : 300
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Author: Andrew B. Bernard
Publisher:
ISBN:
Category : Free trade
Languages : en
Pages : 66
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Book Description
This paper develops a general equilibrium model of multi-product firms and analyzes their behavior during trade liberalization. Firm productivity in a given product is modeled as a combination of firm-level "ability" and firm-product-level "expertise", both of which are stochastic and unknown prior to the firm's payment of a sunk cost of entry. Higher firm-level ability raises a firm's productivity across all products, which induces a positive correlation between a firm's intensive (output per product) and extensive (number of products) margins. Trade liberalization fosters productivity growth within and across firms and in aggregate by inducing firms to shed marginally productive products and forcing the lowest-productivity firms to exit. Though exporters produce a smaller range of products after liberalization, they increase the share of products sold abroad as well as exports per product. All of these adjustments are shown to be relatively more pronounced in countries' comparative advantage industries.
Author: John Lopresti
Publisher:
ISBN:
Category :
Languages : en
Pages : 53
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Book Description
A recent theoretical literature has emphasized the importance of multiproduct firms in trade. However, models within this literature have reached contradictory conclusions regarding the product-level response of firms to changes in trade costs. This paper attempts to resolve these contradictions by employing Bayesian techniques to estimate the product portfolio response throughout the distribution of U.S. firms following the Canada-US Free Trade Agreement of 1989. I find evidence of a differential response among firms that are heterogeneous in terms of their involvement in foreign markets. Firms with less than 10-20 percent of total sales accounted for by foreign markets reduced product diversification as trade costs fell, while more foreign-oriented firms increased diversification.
Author: Volker Nocke
Publisher:
ISBN:
Category : Business enterprises
Languages : en
Pages : 30
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Book Description
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.
Author: Xiaohua Bao
Publisher:
ISBN:
Category : International economic relations
Languages : en
Pages :
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Book Description
Multiproduct firms are responsible for the vast majority of global trade. A prior literature examines how multiproduct firms respond to trade liberalizations that simultaneously affect all of the firms' products and inputs. In contrast, our study uses Chinese firm-product-level export data to examine how an AD action, a very targeted trade policy against a specific product in a specific export destination, affects a multiproduct firms' price and quantity decisions across its other products and export destinations. We find robust evidence for a new phenomenon we call within-firm cross-product trade deflection whereby an AD duty against one of the firm's products in one of its export destinations is associated with reduced prices and increased sales of its other products across all markets. This type of effect depends on increasing costs from joint production within multiproduct firms, something that is often assumed away in many models of the multiproduct firm. We also document for the first time a within-firm chilling effect whereby an AD action in one export destination on a product leads the firm to raise price and lower quantity of the product in other export destinations to lower the risk of AD actions in these other markets.
Author: Larry D. Qiu
Publisher:
ISBN:
Category :
Languages : en
Pages : 53
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This paper provides a theoretical and empirical analysis of the effects of one-sided tariff cuts on firms' export product scope. The theoretical model explicitly incorporates cost of management in addition to the commonly used production cost. Firms are heterogeneous in terms of managerial efficiency but homogenous in terms of production productivity. The analysis predicts that the home country's tariff cut reduces all home firms' export product scope, whereas in response to the foreign country's tariff cut, a home firm's export product scope expands (shrinks) if the firm's management cost is low (high). These predictions are supported by our empirical analysis based on data on Chinese firms from 2000 to 2006.
Author: Van Pham
Publisher:
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Category :
Languages : en
Pages :
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