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Trade, Location and Multiproduct Firms

Author

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  • Rikard FORSLID
  • OKUBO Toshihiro
Abstract
In this paper we study how trade liberalization affects the location and the product scope of firms. We find that the largest and most productive multiproduct firms concentrate to the larger market as a result of trade liberalization. Given some relocation costs, we also find that these firms will expand their product range in the larger market while firms in the smaller market will contract their product scope. These effects are magnified with firm-level productivity. The findings are consistent with Japanese manufacturing firm data.

Suggested Citation

  • Rikard FORSLID & OKUBO Toshihiro, 2018. "Trade, Location and Multiproduct Firms," Discussion papers 18075, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:18075
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    File URL: https://www.rieti.go.jp/jp/publications/dp/18e075.pdf
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    References listed on IDEAS

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    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration

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