TY  - JOUR
AU  - Nocke,Volker
AU  - Yeaple,Stephen
TI  - Globalization and Endogenous Firm Scope
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12322
PY  - 2006
Y2  - June 2006
UR  - http://www.nber.org/papers/w12322
L1  - http://www.nber.org/papers/w12322.pdf
N1  - Author contact info:
Volker Nocke
Department of Economics
University of Mannheim
68131 Mannheim
Germany
Tel: +49-0621-1811836
E-Mail: nocke@uni-mannheim.de

Stephen Yeaple
Department of Economics
The Pennsylvania State University
520 Kern Building
University Park, PA 16802-3306
Tel: 8148655452
E-Mail: sry3@psu.edu
AB  - 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.
ER  -