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Multiplant strategy under core-periphery structure

By Kenmei Tsubota


A typical implicit assumption on monopolistic competition models for trade and economic geography is that firms can produce and sell only at one place. This paper fallows endogenous determination of the number of plants in a new economic geography model and examine the stable outcomes of organization choice between single-plant and multi-plant in two regions. We explicitly consider the firms' trade-off between larger economies of scale under single plant configuration and the saving in interregional transport costs under multi-plant configuration. We show that organization change arises under decreasing transportation costs and observe several organization configurations under a generalized cost function

Topics: Industrial management, Business enterprises, Multi-plant firms, Transaction costs, New economic geography, 335.33, G World,others, D21 - Firm Behavior, F12 - Models of Trade with Imperfect Competition and Scale Economies, L23 - Organization of Production, R12 - Size and Spatial Distributions of Regional Economic Activity;
Publisher: 日本貿易振興機構アジア経済研究所
Year: 2012
OAI identifier: oai:ir:2344/1138

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