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Market Size, Division of Labor, and Firm Productivity / Thomas Chaney, Ralph Ossa.
- Format:
- Book
- Author/Creator:
- Chaney, Thomas.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w18243.
- NBER working paper series no. w18243
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2012.
- Summary:
- We generalize Krugman's (1979) 'new trade' model by allowing for an explicit production chain in which a range of tasks is performed sequentially by a number of specialized teams. We demonstrate that an increase in market size induces a deeper division of labor among these teams which leads to an increase in firm productivity. The paper can be thought of as a formalization of Smith's (1776) famous theorem that the division of labor is limited by the extent of the market. It also sheds light on how market size differences can limit the scope for international technology transfers.
- Notes:
- Print version record
- July 2012.
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