Multi-product firms and gains from trade through intra-firm adjustments

Michael Irlacher

Economics Bulletin, 2018, vol. 38, issue 4, 2266-2272

Abstract: This paper investigates welfare gains associated with trade induced adjustments within multi-product firms. To disentangle the welfare gains, I focus on two distinct channels: investments in i) product variety and ii) the degree of product differentiation. Trade integration enables firms to exploit economies of scale in innovation and induces more investments in product scope. To reduce cannibalization among varieties, multi-product firms have incentives to invest in the degree of differentiation. I show how variety loving consumers benefit from a wider and more diversified product range.

Keywords: Multi-product firms; Gains from trade; R&D; Cannibalization effect; Product differentiation (search for similar items in EconPapers)
JEL-codes: F1 L2 (search for similar items in EconPapers)
Date: 2018-12-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2018/Volume38/EB-18-V38-I4-P206.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-17-00822

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().