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Strategic Divisionalization, Product Differentiation and International Competition

Author

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  • Iwasa, Kazumichi
  • Kikuchi, Toru

Abstract

In this note we construct a simple international differentiated duopoly model that involves a divisionalization decision. It will be shown that the number of third market divisions of a parent firm with a cost advantage is relatively large. The results imply that the cost competitiveness of one country’s firm will be magnified through divisionalization decisions.

Suggested Citation

  • Iwasa, Kazumichi & Kikuchi, Toru, 2007. "Strategic Divisionalization, Product Differentiation and International Competition," MPRA Paper 5120, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:5120
    as

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    File URL: https://mpra.ub.uni-muenchen.de/5120/1/MPRA_paper_5120.pdf
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    References listed on IDEAS

    as
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    7. Ziss, Steffen, 1998. "Divisionalization and product differentiation," Economics Letters, Elsevier, vol. 59(1), pages 133-138, April.
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    9. Brander, James A., 1995. "Strategic trade policy," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 27, pages 1395-1455, Elsevier.
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    More about this item

    Keywords

    divisionalization; product differentiation; cost competitiveness;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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