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https://doi.org/10.24149/gwp12...
Article . 2012 . Peer-reviewed
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The Between Firm Effect with Multiproduct Firms

Authors: Tuan Anh Luong;

The Between Firm Effect with Multiproduct Firms

Abstract

This paper studies multi-product firms with two factors of production: unskilled and skilled labor (talent). Creating new products is skill intensive while production is less skill intensive. We show here a new effect: an increase in the skilled labor supply, relatively to unskilled labor, could reduce the number of products but increase the average scale per product. The relative strength of this effect depends on the degree of firm heterogeneity and the extent to which we allow multiple products within the firm. Moreover, the survival cut-off can be higher (or lower) if the fixed costs (or the variable costs) are lower. Economic integration influences this survival cut-off only through the ratio of skilled labor to unskilled labor, but not the market size. This policy is welfare enhancing but the gains might be non uniformly distributed across agents. The paper also sheds light on the pattern of trade with only one industry.

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Keywords

Trade ; Productivity ; Labor economics

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
0
Average
Average
Average
bronze
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