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Journal articles
Market Size, Division of Labor, and Firm Productivity
Abstract : We generalize Krugman's (1979) ‘new trade’ model by allowing for an explicit production chain in which a range of tasks is performed sequentially by a number of specialized teams. We demonstrate that an increase in market size induces a deeper division of labor among these teams which leads to an increase in firm productivity. The paper can be thought of as a formalization of Smith's (1776) famous theorem that the division of labor is limited by the extent of the market. It also sheds light on how market size differences can limit the scope for international technology transfers.
https://hal-sciencespo.archives-ouvertes.fr/hal-03579667
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Submitted on : Friday, February 18, 2022 - 11:04:43 AM
Last modification on : Friday, March 25, 2022 - 3:58:06 AM
Long-term archiving on: : Thursday, May 19, 2022 - 6:38:07 PM
Contributor : Spire Sciences Po Institutional Repository Connect in order to contact the contributor
Submitted on : Friday, February 18, 2022 - 11:04:43 AM
Last modification on : Friday, March 25, 2022 - 3:58:06 AM
Long-term archiving on: : Thursday, May 19, 2022 - 6:38:07 PM
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