Iwasa, Kazumichi and Kikuchi, Toru (2007): Strategic Divisionalization, Product Differentiation and International Competition.
Download (306kB) | Preview
In this note we construct a simple international differentiated duopoly model that involves a divisionalization decision. It will be shown that the number of third market divisions of a parent firm with a cost advantage is relatively large. The results imply that the cost competitiveness of one country’s firm will be magnified through divisionalization decisions.
|Item Type:||MPRA Paper|
|Original Title:||Strategic Divisionalization, Product Differentiation and International Competition|
|Keywords:||divisionalization; product differentiation; cost competitiveness|
|Subjects:||F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies ; Fragmentation|
|Depositing User:||Users 1329 not found.|
|Date Deposited:||01 Nov 2007|
|Last Modified:||23 Jun 2016 23:34|
 Amiti, M., and K. Wakelin (2003) ‘Investment Liberalization and International Trade,’ Journal of International Economics, Vol. 61, pp. 101–126  Baye, M., Crocker, K., and Ju, J. (1996a) ‘Divisionalization, Franchising and Divestiture Incentives in Oligopoly,’ American Economic Review, Vol. 38, pp. 223–236.  Baye, M., Crocker, K., and Ju, J. (1996b) ‘Divisionalization, Franchising Incentives with Integral Competing Units,’ Economics Letters, Vol. 50, pp. 429–435.  Brander, J. (1995) ‘Strategic Trade Policy,’ in Grossman, G., and K. Rogoff (eds.) Handbook of International Economics, Vol. 3, Amsterdam: North- Holland, pp. 1395–1455.  Bulow, J., Geanakoplos, J., and P. Klemperer (1985) ‘Multimarket Oligopoly: Strategic Substitutes and Complements,’ Journal of Political Economy, Vol. 93, pp. 488–511.  Collie, D., and D. de Meza (2003) ‘Comparative Advantage and the Pursuit of Strategic Trade Policy,’ Economics Letters, Vol. 81, pp. 279–283.  Corchon, L. (1991) ‘Oligopolistic Competition among Groups,’ Economics Letters, Vol. 36, pp. 1–3.  Kikuchi, T., and C. Kobayashi (2007) ‘Comparative Advantage and Divisionalization in the Third Market,’ unpublished manuscript.  Markusen, J. R. (1995) ‘The Boundaries of Multinational Enterprises and the Theory of International Trade,’ Journal of Economic Perspectives, Vol. 9, pp. 169–189.  Polasky, S. (1992) ‘Divide and Conquer: On the Profitability of Forming Independent Rival Decisions,’ Economics Letters, Vol. 40, pp. 365–371.  Yuan, L. (1999) ‘Product Differentiation, Strategic Divisionalization, and Persistence of Monopoly,’ Journal of Economics and Management Strategy, Vol. 8, pp. 581–602.  Ziss, S. (1998) ‘Divisionalization and Product Differentiation,’ Economics Letters, Vol. 59, pp. 133–138.