International Research Seminar "Study of vertical integration in international trade". Presentation by Anders Laugesen.

On December 04, 2012, at 12:00 MSSE was held a public research seminar. Report on the theme "Complementary Activities, Heterogeneous Firms, and Industry Structure" by Anders Laugesen (Aarhus University).

A. Laugesen

On December 04, 2012, 12:00 - 14:00.
Public Research seminar.
Anders Laugesen (Aarhus University). "Complementary Activities, Heterogeneous Firms, and Industry Structure".

We analyse firm-level complementary activities in general equilibrium with heterogeneous firms. We assume that firm profits are supermodular in the activities faced by firms and show how general-equilibrium effects complicate firm-level comparative statics. Despite the complementarities implied by supermodularity, introducing new activities, or increasing the attractiveness of existing activities, may lead a firm to either increase, maintain, or reduce its level of any given activity. Notwithstanding this ambiguity at the firm level, we present conditions that are sufficient for generating monotone comparative statics at the industry level of analysis. These results suggest that firm-level complementarities may assert themselves more clearly at the industry level than at the firm level; an insight that is important to keep in mind for empirical purposes. Our results are shown to be applicable to several recent and well-known models at the intersection of international and organisational economics.

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A.Laugesen. Complementarity activities...

The address of the seminar: b. 47, pr. Rimskogo-Korsakova (building of the bank "Saint-Petersburg bank", conference hall, 3rd floor), Saint Petersburg.

Web-page of the international research seminars "Study of vertical integration in international trade"...