- Minerva G.A., The proximity-concentration trade-off with multiproduct multinational firms.
Abstract: I study the proximity-concentration trade-off faced by two multiproduct multinational firms that operate in two
countries under horizontal product differentiation. In this context, characterized by two-way trade and FDI, the trade-off regulates
the number of domestic affiliates (concentration) against the number of foreign affiliates (proximity). I show how multinationals'
market shares and markups react to changes in trade and investment frictions, and in the degree of product substitutability.
Under plausible parameters restrictions, the model is consistent with the stylized fact that, in U.S. and Japan, the number
of foreign affiliates is inversely related to the market share held by multinationals in their domestic market.
Best Conferece Paper Award at the 9th FIW Research Conference,
University of Vienna.