Abstract The feature of "local products and foreign sales" of export may produce economies of scale. This paper introduces economies of scale in the model of Melitz (2003), and draws a different conclusion: if the economies of scale induced by export is large enough, even if the profits of exports is negative, companies are still likely to enter the international markets. Through dividing the fixed costs, this paper incorporates "local market effects" of Krugman (1980), self-selection effects of Melitz (2003), and institutional quality effects of Zhang Jie etc. (2008) into a unified analytical framework.
ZHANG Cheng-Yong. Economies of Scale, Heterogeneous Productivity and Internationalization——An Extension Study of Krugman Model. Economic Survey, 2012, 1(4): 051.
2012, Vol. 1 
