Arbeitspapier

Competing in Organizations: Firm Heterogeneity and International Trade

This paper develops a theory which investigates how firms’ choice of corporate organization is affecting firm performance and the nature of competition in international markets. We develop a model in which firms’ organisational choices determine heterogeneity across firms in size and productivity in the same industry. We then incorporate these organisational choices in a Krugman cum Melitz and Ottaviano model of international trade. We show that the toughness of competition in a market depends on who - headquarters or middle managers - have power in firms. Furthermore, we propose two new margins of trade adjustments: the monitoring margin and the organizational margin. International trade may or may not lead to an increase in aggregate productivity of an industry depending on which of these margins dominate. Trade may trigger firms to opt for organizations which encourage the creation of new ideas and which are less well adapt to price and cost competition.

Language
Englisch

Bibliographic citation
Series: Munich Discussion Paper ; No. 2007-20

Classification
Wirtschaft
Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
Empirical Studies of Trade
Firm Organization and Market Structure
Organizational Behavior; Transaction Costs; Property Rights
Subject
international trade with endogenous firm organizations and endogenous toughness of competition
firm heterogeneity
power struggle in the firm
Unternehmensorganisation
Management
Produktivität
Internationaler Wettbewerb
Wirtschaftsmodell

Event
Geistige Schöpfung
(who)
Marin, Dalia
Verdier, Thierry
Event
Veröffentlichung
(who)
Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät
(where)
München
(when)
2007

DOI
doi:10.5282/ubm/epub.1933
Handle
URN
urn:nbn:de:bvb:19-epub-1933-3
Last update
10.03.2025, 11:46 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Marin, Dalia
  • Verdier, Thierry
  • Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät

Time of origin

  • 2007

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