This paper develops a monopolistic competition model to study the characteristics of products, such as quality improvement and product diversity (function-specialization and individualization), and the division of labor in production. Different from the ordinary economic model, our utility...

The analysis of economies of specialization at the individual level by Yang & Shi (1992) and Yang & Ng (1993) is combined with the Dixit & Stiglitz (1977) analysis of monopolistic-competitive firms to show that, ignoring administrative costs and indirect effects (such as rent-seeking), even if...

Through altering competitive conditions, globalisation can have a significant impact on productivity of the domestic economy. Foreign competition can stimulate the productivity improvements by domestic firms or it can lead to the elimination of inefficient producers. Alternatively, the threat or...