We develop a two-sector model of monopolistic competition with a differentiated intermediate good and variable elasticity of technological substitution. This setting proves to be well-suited to studying the nature and origins of external increasing returns. We disentangle two sources of scale...

We provide evidence that over the past 30 years, U.S. firms have expanded their scope of operations. Increases in scope and scale were achieved largely without increasing traditional operating segments. Scope expansion significantly increases valuation and is primarily realized through...

The role of competition and diversity in economic performance : an overview -- Concepts of economic competition and performance in context -- Diversity of consumers, product innovation and economic performance -- Schumpeter and the dynamics of capitalism : the driving force of business...