The Division of Labor within Firms, Optimal Entry, and Firm Productivity

Koji Shintaku

Discussion papers from Graduate School of Economics Project Center, Kyoto University

Abstract: Constructing an intra-industry trade model with division of labor within firms, this paper shows that opening up to trade improves firm productivity. Firms choose the number of markets they export. Optimal entry conditions for export markets rule out loss from opening up to trade. Under fixed export costs, opening up to trade makes some firms exit and concentrates labor to surviving firms through recruiting process and induces the division of labor. An increase in the number of markets induces firms to enter more export markets and improves firm productivity in the long run and has the reverse effect on firm productivity in the short run.

Keywords: the division of labor within firms; firm productivity; the optimal number of markets firms enter; fixed export costs (search for similar items in EconPapers)
JEL-codes: F12 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2014-12
New Economics Papers: this item is included in nep-bec and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:kue:dpaper:e-14-012

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