Coordination Costs, Market Size, and the Choice of Technology

Haiwen Zhou

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2019, vol. 14, issue 1, 131-148

Abstract: Impact of coordination costs and market size on a firm's choice of technology is studied in a general equilibrium model in which firms engage in oligopolistic competition. A firm establishes an organizational hierarchy to coordinate its production. First, it is shown that an increase in market size leads a firm to choose a more specialized technology. Second, surprisingly, a robust result is that an increase in the level of coordination efficiency leads a firm to choose a less specialized technology.

Keywords: division of labor; coordination efficiency; technology choice; hierarchy; market size (search for similar items in EconPapers)
JEL-codes: D43 L13 O14 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (3)

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http://journal.hep.com.cn/fec/EN/10.3868/s060-008-019-0008-6 (application/pdf)

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Working Paper: Coordination Costs, Market Size, and the Choice of Technology (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:fec:journl:v:14:y:2019:i:1:p:131-148

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