Firms in Product Space: Adoption, Growth and Competition

Luca Macedoni, John Morrow and Vladimir Tyazhelnikov

No 11398, CESifo Working Paper Series from CESifo

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 and scope growth. If all firms produced all products linked by co-production, consumer welfare could increase by 16-30% under constant markups, rising to 46-86% under variable markups.

Keywords: multi-product firms; firm capabilities; product classification; product space; growth paths (search for similar items in EconPapers)
JEL-codes: D20 F10 L10 L23 L25 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-bec, nep-com and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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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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