Product line extensions: causes and effects

Kostas Axarloglou
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Kostas Axarloglou: Democritus University of Thrace, Komotini, Greece, Postal: Democritus University of Thrace, Komotini, Greece

Managerial and Decision Economics, 2008, vol. 29, issue 1, pages 9-21

Abstract: In this paper, and using data from a sample of five US manufacturing industries, we study the implications of market demand growth on product line extensions and the effects of the latter on industry profit margins. Companies extend their product lines in response to expansions in market demand and this tends to depress profit margins in the industry. Finally, these results are quantitatively significant. Copyright © 2007 John Wiley & Sons, Ltd.

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