Hansen, Jørgen Drud; Nielsen, Jørgen Ulff-Møller - In: Review of International Economics 18 (2010) 2, pp. 229-242
This paper develops an international trade model where firms in a duopoly may diversify their technologies for strategic reasons. The firms face the same set of technologies given by a tradeoff between marginal costs and fixed costs, but depending on trade costs firms may choose different...