Economics Seminar（2013-18）

Topic: Multiproduct Firms and Scope Adjustment in Globalization

Speaker: Wen Zhou (website: www.fbe.hku.hk/staff/wzhou/)

Affiliation: University of Hong Kong

Time: Friday, September 13, 2-3:30 pm
Location: Guanghua Building 2,Room217

Abstract：

A model of heterogeneous firms with variety-specific fixed costs is developed and analyzed to study how multiproduct firms respond to globalization. In contrast with most existing models, the analysis demonstrates that more-productive firms may expand their product scope, which in turn may push up their average costs. A necessary and sufficient condition for scope expansion is that the fixed cost of introducing more varieties increases rapidly with the product scope. With increasing globalization, the percentage of scope-expanding firms diminishes and eventually becomes zero.

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