Demand and Supply Linkages in Exporting Multiproduct Firms

Carsten Eckel, Lisandra Flach () and Ning Meng

No 12530, CESifo Working Paper Series from CESifo

Abstract: Products produced by multiproduct firms can be linked through demand linkages (cannibalization), supply linkages (joint production), or both. We analyze how these within-firm linkages shape the propagation of shocks - such as tariffs - across products and markets and affect firm performance through changes in markups and marginal costs. Exploiting antidumping duties as firm-product-market specific shocks, we provide evidence of both types of linkages and quantify their relative importance. On average, two-thirds of within-firm linkages arise from demand linkages and one-third from supply linkages, with substantial heterogeneity across industries. We further estimate their effects on markups and marginal costs, showing that roughly 80% of the adjustment occurs through marginal costs and 20% through markups. Our findings indicate that disregarding either type of linkage can lead to sizable misestimations of markups and pass-through rates.

Keywords: multiproduct firms; cannibalization effect; joint production; demand linkages; supply linkages; antidumping duties; markups; marginal costs (search for similar items in EconPapers)
JEL-codes: D21 D22 D24 F12 F13 F14 L11 L25 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12530

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