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 heterogeneousfirms with variety-specificfixed costs is developed and analyzed to study how multiproductfirms respond to globalization. In contrast with most existing models, the analysis demonstrates that more-productivefirms may expand their product scope, which in turn may push up their average costs. A necessary and sufficient condition for scope expansion is that thefixed cost of introducing more varieties increases rapidly with the product scope. With increasing globalization, the percentage of scope-expandingfirms diminishes and eventually becomes zero.

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