Firms in product space: Adoption, growth and competition

Luca Macedoni, John Morrow and Vladimir Tyazhelnikov

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: Which products are potentially produced together? When demand for a product increases, which firms will supply it? Using multi-product production patterns within and across firms, we recover a continuous cost based distance between firms and unproduced products. Higher product distance implies decreasing adoption frequency. When export demand induces domestic product adoption, closer firms provide this supply. Potential costs imply measures of Revenue and Competition Potential. These predict firm sales growth, scope growth and core focus. If all firms produced all products linked by co-production, consumer welfare would increase by 10-30%.

Keywords: multi-product firms; firm capabilities; product classification; product space; growth paths (search for similar items in EconPapers)
Date: 2024-02-02
New Economics Papers: this item is included in nep-bec and nep-com
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Related works:
Working Paper: Firms in Product Space: Adoption, Growth and Competition (2024)
Working Paper: Firms in Product Space: Adoption, Growth and Competition (2024)
Working Paper: Firms in product space: adoption, growth and competition (2024)
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