Frontiers of Economics in China
Impact of coordination costs and market size on a firm’s choice of technology is studied in a general equilibrium model in which firms engage in oligopolistic competition. A firm establishes an organizational hierarchy to coordinate its production. First, it is shown that an increase in market size leads a firm to choose a more specialized technology. Second, surprisingly, a robust result is that an increase in the level of coordination efficiency leads a firm to choose a less specialized technology.
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Original Publication Citation
Zhou, H. (2019). Coordination costs, market size, and the choice of technology. Frontiers of Economics in China, 14(1), 131-148. https://journal.hep.com.cn/fec/EN/10.3868/s060-008-019-0008-6
Zhou, Haiwen, "Coordination Costs, Market Size, and the Choice of Technology" (2019). Economics Faculty Publications. 58.