Does globalization lead to specialization?
AbstractThe relationship between market integration and the degree of specialization plays a key role in many areas of economics. In contrast to previous studies, we illustrate that globalization does not necessarily lead to specialization. The analysis is conducted in an extended Dixit-Stiglitz- Ethier framework. Whether globalization leads to specialization or to more integrated production structures depends on characteristics of the cost function and on firm behavior. By comparing these changes to the optimal degree of specialization we show that globalization can reduce the efficiency of the industrial structure. --
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Bibliographic InfoPaper provided by University of Goettingen, Department of Economics in its series Center for European, Governance and Economic Development Research Discussion Papers with number 20.
Date of creation: 2003
Date of revision:
Fragmentation; Specialization; Market Integration; Globalization; Vertical Equilibrium; Economies of Scale;
Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
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