Multiproduct competition in a North-South model with technological differences

Kyungmin Kim

International Review of Economics & Finance, 2018, vol. 54, issue C, 262-273

Abstract: This paper examines multiproduct competition in a simple North-South model with technological differences. I mainly focus on strategic decisions on the product scope in the global economy. I find that there are several different types of equilibria depending on technological differences and relative cost advantage of the Northern and Southern firms. When each firm has local cost advantage and technological difference between firms is sufficiently large, firms reallocate resources toward their more profitable products. By contrast, when there exists a small technological difference or global cost advantage, the more productive firm may expand the product line.

Keywords: Multiproduct firms; Product scope; Technological differences; Relative cost advantage (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:54:y:2018:i:c:p:262-273

DOI: 10.1016/j.iref.2017.09.001

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