Rikard Forslid in Regional Science and Urban Economics
In the article "Trade, location, and multi-product firms", Rikard Forslid together with Toshihiro Okubo examine how trade liberalization affects the location and the product scope of firms.
Rikard Forslid, Stockholm University, och Toshihiro Okubo, Keio University, find that trade liberalization induces the most productive firms to relocate to the larger market, where they expand their product scope. The presence of multi-product firms dampens agglomeration. The adjustment of firms’ product scope is a substitute for firm relocation, and one implication of our analysis – for empirical studies – is that changes in the number of firms in a market may underestimate the degree of agglomeration.
Last updated: March 24, 2023
Source: Department of Economics