[PDF] Product Diversification Of Us Manufacturing Firms eBook

Author : Hsiao-shan Yang
Publisher :
Page : 126 pages
File Size : 22,30 MB
Release : 2011
Category :
ISBN :

GET BOOK

This dissertation consists of two studies. One is about the level of product diversification of multiproduct firms. The other is about the product switching decision of multiproduct firms. Most of the existing studies rely on economies of scope or strategic considerations to explain why firms produce multiple products. However, only a few explain why the level of product diversification varies across multiproduct firms. I extend the Dixit-Stiglitz monopolistic competitive model to analyze product diversification of heterogeneous multiproduct firms, focusing on the role of firm-specific productivity. The model shows that the firm's level of product diversification is determined by and positively related to its productivity at the equilibrium. Using data from the Thomas Register of American Manufacturers and Compustat, I test the prediction of the theoretical model.^To overcome simultaneity bias associated with productivity, I implement a IV estimation where I use the number of product varieties offered by the upstream industries of a firm as the instrumental variable to identify exogenous changes in the firm's productivity. This IV strategy is motivated by Romer (1990) who argues that technological changes can take the form of increases in the variety of intermediate inputs. I find strong and robust empirical evidence consistent with the prediction of the theoretical model--firm productivity is a causal factor for product diversification. To understand product switching decision, I further expand the Dixit-Stiglitz model to allow for product-specific shocks. In this model, firm-specific productivity determines the range of products, and product-specific relative consumer's preference determines the composition of products offered by the firm.^This shows that, in the absence of productivity shocks, product-specific shocks induce product switching--adding the product experienced a positive demand shock and dropping the product undergone a negative shock from its original product portfolio. Assuming that a product experiences positive shocks before the market shakeout and negative shocks after shakeout as it goes through its life cycle, this result suggests that the incidence of product switching is positively correlated with the proportion of the firm's products that are in the early (growing) stage of their life cycles. This prediction is confirmed in the empirical estimation. In addition to product-specific demand shocks, I also find that larger and older firms as well as firms facing greater market competition are more likely to switch products.

Author : Michael Gort
Publisher : Praeger
Page : 272 pages
File Size : 13,84 MB
Release : 1984-08-21
Category : Business & Economics
ISBN :

GET BOOK

This volume provides a comprehensive view of the interindustry structure of the large diversified enterprise. The study shows that companies have diversified mainly into industries experiencing rapid technological change.

Author : James Michael MacDonald
Publisher :
Page : 52 pages
File Size : 23,15 MB
Release : 1985
Category : Agricultural processing industries
ISBN :

GET BOOK

Extract: Leading U.S. food manufacturers typically produce and sell a growing array of food products. Many have also expanded into related wholesale, transportation, and food service industries, while avoiding large-scale involvement in agriculture and food retailing. Diversification by food manufacturers into unrelated product lines declined in the seventies. That decline, coupled with continued increases in diversification into food-related products, led to stabilization in average levels of diversification, after persistent increases since 1919. Successful diversification frequently depends on how readily employees' skills can be transferred to new products. Much recent diversification in the food industries has been based upon the transfer of marketing skills among consumer product industries and technical skills in commodity processing and transportation among producer goods industries.

Author : John T. Scott
Publisher : Cambridge University Press
Page : 284 pages
File Size : 20,17 MB
Release : 1993-06-25
Category : Business & Economics
ISBN : 9780521430159

GET BOOK

This book examines product-line diversification of large manufacturing firms. It introduces and applies methodology that discerns groups of manufacturing industries related by complementarities in production, marketing, distribution, and research and development activities. Manufacturing firms intentionally vary production to exploit these complementarities, and Professor Scott uses evidence from U.S. manaufacturing to explore hypotheses about such purposive diversification and ensuing economic performance, including product diversification's effects on both static efficiency and the optimality of R&D investment. This study yields new perspectives on the policy debate about cooperation versus competition among firms: will industrial performance be better if leading firms cooperate on research, production, and marketing? Professor Scott shows that the answers depend on circumstances that vary with different industrial environments. His analysis offers insights about business strategy and public policy toward business combinations in conglomerate, vertical, and horizontal mergers and in cooperative R&D ventures.

Author : Charles Horace Berry
Publisher : Princeton University Press
Page : 198 pages
File Size : 33,79 MB
Release : 2015-03-08
Category : Business & Economics
ISBN : 1400872960

GET BOOK

As an increasing number of large corporations branch out into many fields of industry, public concern over the lateral extension of their power is aroused. Arguing that entry by large firms into concentrated industries may instead stimulate competition, Charles H. Berry analyzes the effect that such diversification has on corporate growth and on the structure and functioning of industrial markets. To identify a relationship between the growth of large corporations and the pattern of their diversifying activities, Professor Berry examines 460 of the largest U.S. industrial corporations. In tracing the effects of their entry into some 200 manufacturing industries, he develops new and striking evidence of the protected position of leading firms in concentrated industries, a position that can be effectively undermined by the diversification of more powerful corporations into these industries. Originally published in 1975. The Princeton Legacy Library uses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These editions preserve the original texts of these important books while presenting them in durable paperback and hardcover editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.