Kiel Working Papers, Kiel Institute for World Economics
No 1711:
Manufacturers and Retailers in the Global Economy
Horst Raff and Nicolas Schmitt
Abstract: We develop a general-equilibrium model to capture key
features of the retailing and of the manufacturing industry in order to
understand how these two industries interact and how labor is allocated
between them. We show that the observed shift in employment from
manufacturing to retailing, the rise in retailer product assortment and the
emergence of slotting allowances in many retail markets are consistent with
the global integration of product markets, while higher retail market
concentration is best explained by technological change in retailing. We
also identify a novel benefit from market integration consisting of
efficiency gains in the vertical distribution chain
Keywords: international trade, product variety, retailing, slotting allowance, multi-product firms; (follow links to similar papers)
JEL-Codes: F12,; F15,; L13; (follow links to similar papers)
30 pages, June 2011
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