IDEAS home Printed from https://ideas.repec.org/a/bla/reviec/v27y2019i4p1040-1062.html
   My bibliography  Save this article

Globalization and firm‐level cost structure

Author

Listed:
  • Hui Ding
  • Xiaoyan Lu
  • Ying Zheng

Abstract

In this study, we draw on economic theories of cost structure and the effects of international trade on firms' productivity to assess firm‐level cost behavior in the context of globalization. We investigate why and how trade openness affects firms' cost structure by examining the changes of fixed inputs along with those in capacity levels. Using a sample consisting of 25 countries from 2000 to 2014, we find that trade openness does significantly affect firms fixed and variable cost inputs, which indicate that production uncertainty along with international trade is essential to the cost structure decision in terms of cost rigidity. Furthermore, larger firms are more likely to adopt a rigid cost structure with higher fixed costs and lower variable costs because they are more involved in the international economy and more exposed to associated uncertainties.

Suggested Citation

  • Hui Ding & Xiaoyan Lu & Ying Zheng, 2019. "Globalization and firm‐level cost structure," Review of International Economics, Wiley Blackwell, vol. 27(4), pages 1040-1062, September.
    • Handle: RePEc:bla:reviec:v:27:y:2019:i:4:p:1040-1062
    DOI: 10.1111/roie.12409
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/roie.12409
    Download Restriction: no
    File URL: https://libkey.io/10.1111/roie.12409?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ma, Minda & Ma, Xin & Cai, Wei & Cai, Weiguang, 2020. "Low carbon roadmap of residential building sector in China: Historical mitigation and prospective peak," Applied Energy, Elsevier, vol. 273(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:reviec:v:27:y:2019:i:4:p:1040-1062. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.