Estimating Production Functions of Multiproduct Firms

Nelli Valmari

The Review of Economic Studies, 2023, vol. 90, issue 6, 3315-3342

Abstract: Multiproduct firms constitute a considerable share of firms and account for an even greater share of production. Nevertheless, the vast majority of production function estimates are based on the assumption that firms are single-product manufacturers. This assumption is due to a lack of data on how firms allocate their inputs across their various product lines. I provide a strategy for estimating product-specific input allocations and production functions of multiproduct firms involved in monopolistic competition. The strategy is based on using firms’ product prices and output demand in solving for product-level input allocations.

Keywords: Multiproduct firm; Production function; Productivity (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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