Does competition lead to customization?
Wen-Tai Hsu (),
Yi Lu () and
Travis Ng ()
Journal of Economic Behavior & Organization, 2014, vol. 106, issue C, 10-28
This paper proposes a theory of competition and customization. When firms allocate their production to both custom-made and standardized products, the fraction of sales from the former will increase in the face of increased competition. Recent surveys conducted by the World Bank on Chinese firms provide a rare direct measure of customization that allows us to test the above-mentioned prediction. We find empirical results consistent with the prediction.
Keywords: Customization; Competition; Manufacturing; Spatialcompetition (search for similar items in EconPapers)
JEL-codes: D43 L11 L15 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:106:y:2014:i:c:p:10-28
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