Haiwen Zhou

Author information

Department of Economics, Old Dominion University, Norfolk, VA 23529, USA

E-mail: hzhou@odu.edu

Abstract

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.

Keywords

division of labor, coordination efficiency, technology choice, hierarchy, market size

Cite this article

Haiwen Zhou. Coordination Costs, Market Size, and the Choice of Technology. Front. Econ. China, 2019, 14(1): 131‒148 https://doi.org/10.3868/s060-008-019-0008-6