@techreport{NBERw12322,
 title = "Globalization and Endogenous Firm Scope",
 author = "Volker Nocke and Stephen Yeaple",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "12322",
 year = "2006",
 month = "June",
 URL = "http://www.nber.org/papers/w12322",
 abstract = {We develop a theory of multiproduct firms to analyze the effects of globalization on the distributions of firm size, scope, and productivity. Our model explains two puzzles. First, it explains the well-known size-discount puzzle: large firms have lower values of Tobin%u2019s Q than small firms. Second, it explains the globalization-skewness puzzle documented in the empirical part of our paper: a multilateral reduction in trade costs leads to a flattening of the size distribution of firms. In our model, globalization not only affects the distribution of observed productivities but also productivity at the firm level.},
}