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Globalization and Endogenous Firm Scope / Volker Nocke, Stephen Yeaple.
- Format:
- Book
- Author/Creator:
- Nocke, Volker.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w12322.
- NBER working paper series no. w12322
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2006.
- Summary:
- We develop a theory of multiproduct firms to analyze the effects of globalization on the distributions of firm size, scope, and productivity. Our model explains two puzzles. First, it explains the well-known size-discount puzzle: large firms have lower values of Tobin's Q than small firms. Second, it explains the globalization-skewness puzzle documented in the empirical part of our paper: a multilateral reduction in trade costs leads to a flattening of the size distribution of firms. In our model, globalization not only affects the distribution of observed productivities but also productivity at the firm level.
- Notes:
- Print version record
- June 2006.
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