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1、JournalofInternationalEconomics90(2013)177–180ContentslistsavailableatSciVerseScienceDirectJournalofInternationalEconomicsjournalhomepage:www.elsevier.com/locate/jieMarketsize,divisionoflabor,andfirmproductivity☆ab,⁎ThomasChaney,RalphOssaaUniversityofChicago,Departmento
2、fEconomics,1126East59thStreet,Chicago,IL60637,USAbUniversityofChicago,BoothSchoolofBusiness,5807SouthWoodlawnAvenue,Chicago,IL60637,USAarticleinfoabstractArticlehistory:WegeneralizeKrugman's(1979)‘newtrade’modelbyallowingforanexplicitproductionchaininwhichaReceived12Au
3、gust2011rangeoftasksisperformedsequentiallybyanumberofspecializedteams.WedemonstratethatanincreaseReceivedinrevisedform16July2012inmarketsizeinducesadeeperdivisionoflaboramongtheseteamswhichleadstoanincreaseinfirmpro-Accepted4November2012ductivity.Thepapercanbethoughtof
4、asaformalizationofSmith's(1776)famoustheoremthatthedivisionAvailableonline12November2012oflaborislimitedbytheextentofthemarket.Italsoshedslightonhowmarketsizedifferencescanlimitthescopeforinternationaltechnologytransfers.JELclassification:F10©2012ElsevierB.V.Allrightsre
5、served.F12L22L25Keywords:MarketsizeDivisionoflaborFirmproductivityTechnologytransfer1.Introductionlimitedbytheextentofthemarketinanenvironmentinwhichthe1divisionoflabortakesthesameformasinhispinfactory.Byembed-Inthispaper,wedevelopasimplegeneralequilibriummodelindingth
6、epinfactoryintoaframeworkofmonopolisticcompetition,itwhichanincreaseinmarketsizeleadstoanincreaseinthedivisionofovercomesthedilemmaemphasizedbyStigler(1951:185)thatlaborwhichbringsaboutanincreaseinfirmproductivity.Inparticular,“eitherthedivisionoflaborislimitedbytheexte
7、ntofthemarket,wegeneralizeKrugman's(1979)seminal‘newtrade’modelbyopeningandcharacteristically,industriesaremonopolized;orindustriesaretheblackboxoftheproductionfunctionandallowingforanexplicitcharacteristicallycompetitive,andthetheoremisfalseoroflittlesig-productioncha
8、ininwhicharangeoftasksisperformedsequentiallynificance.”Anincreaseinmarketsizeleadstobothadeeperdivisionbyanumberofspe
