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Multiproduct competition in a North-South model with technological differences

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  • Kim, Kyungmin

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.

Suggested Citation

  • Kim, Kyungmin, 2018. "Multiproduct competition in a North-South model with technological differences," International Review of Economics & Finance, Elsevier, vol. 54(C), pages 262-273.
    • Handle: RePEc:eee:reveco:v:54:y:2018:i:c:p:262-273
    DOI: 10.1016/j.iref.2017.09.001
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    References listed on IDEAS

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    1. Qiu, Larry D. & Zhou, Wen, 2013. "Multiproduct firms and scope adjustment in globalization," Journal of International Economics, Elsevier, vol. 91(1), pages 142-153.
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