Product Choice and Product Switching /
Bernard, Andrew B.
Product Choice and Product Switching / Andrew B. Bernard, Peter K. Schott, Stephen Redding. - Cambridge, Mass. National Bureau of Economic Research 2003. - 1 online resource: illustrations (black and white); - NBER working paper series no. w9789 . - Working Paper Series (National Bureau of Economic Research) no. w9789. .
June 2003.
This paper develops a model of endogenous product selection by firms. The theory is motivated by new evidence we present on the importance of product switching by U.S. manufacturers. Two-thirds of continuing firms change their product mix every five years, and product switches involve more than 40% of firm output and almost half of existing products. The theoretical model incorporates heterogeneous firms, heterogeneous products, and ongoing entry and exit. In equilibrium, firm productivity is correlated with product fixed costs, with the most productive firms choosing to make the products with the highest fixed costs. Changes in market structure result in systematic patterns of firm entry/exit and product switching.
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Mode of access: World Wide Web.
Product Choice and Product Switching / Andrew B. Bernard, Peter K. Schott, Stephen Redding. - Cambridge, Mass. National Bureau of Economic Research 2003. - 1 online resource: illustrations (black and white); - NBER working paper series no. w9789 . - Working Paper Series (National Bureau of Economic Research) no. w9789. .
June 2003.
This paper develops a model of endogenous product selection by firms. The theory is motivated by new evidence we present on the importance of product switching by U.S. manufacturers. Two-thirds of continuing firms change their product mix every five years, and product switches involve more than 40% of firm output and almost half of existing products. The theoretical model incorporates heterogeneous firms, heterogeneous products, and ongoing entry and exit. In equilibrium, firm productivity is correlated with product fixed costs, with the most productive firms choosing to make the products with the highest fixed costs. Changes in market structure result in systematic patterns of firm entry/exit and product switching.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.