Multi-Product Firms and Product Switching

Andrew Bernard, Stephen Redding and Peter Schott

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: This paper examines the frequency, pervasiveness and determinants of product switching by U.S. manufacturing firms. We find that one-half of firms alter their mix of five-digit SIC products every five years, that product switching is correlated with both firm- and firm-product attributes, and that product adding and dropping induce large changes in firm scope. The behavior we observe is consistent with a natural generalization of existing theories of industry dynamics that incorporates endogenous product selection within firms. Our findings suggest that product switching contributes to a reallocation of resources within firms towards their most efficient use.

Keywords: Heterogeneous firms; Product differentiation; Product market entry and exit (search for similar items in EconPapers)
JEL-codes: D21 E23 L11 L60 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2008-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
https://www2.census.gov/ces/wp/2008/CES-WP-08-24.pdf First version, 2008 (application/pdf)

Related works:
Working Paper: Multi-Product Firms and Product Switching (2006)
Working Paper: Multi-Product Firms and Product Switching (2006)
Working Paper: Multi-product firms and product switching (2006)
Working Paper: Multi-Product Firms and Product Switching (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:08-24

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