A model of heterogeneous firms with variety-specific fixed costs is developed and analyzed to study how multiproduct firms respond to globalization. In contrast with most existing models, the analysis demonstrates that more-productive firms may expand their product scope, which in turn may push...

A model of heterogeneous firms with multiple products and two production factors (labor and capital) is used to study how trade liberalization affects firms’choices through both product and factor markets. Trade liberalization is shown to always redistribute capital toward more efficient firms...

A model of heterogeneous firms with multiple products and two production factors (labor and capital) is used to study how trade liberalization affects firms' choices through both product and factor markets. Trade liberalization is shown to always redistribute capital toward more efficient firms...