Market Size, Division of Labor, and Firm Productivity

Chaney, Thomas and Ossa, Ralph (2012) Market Size, Division of Labor, and Firm Productivity. , Toulouse

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Official URL: http://tse-fr.eu/pub/26279

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 fim 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.

Item Type: Monograph (Working Paper)
Language: English
Date: July 2012
Place of Publication: Toulouse
Uncontrolled Keywords: Market size, Division of labor, Firm productivity, Technology transfers
JEL codes: F10 - General
F12 - Models of Trade with Imperfect Competition and Scale Economies
L22 - Firm Organization and Market Structure - Markets vs. Hierarchies; Vertical Integration; Conglomerates; Subsidiaries
L25 - Firm Performance - Size, Diversification and Scope
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 09 Jul 2014 17:29
Last Modified: 20 Mar 2018 14:12
OAI ID: oai:tse-fr.eu:26279
URI: http://publications.ut-capitole.fr/id/eprint/15394

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