Michael Irlacher,
"Multiproduct Firms in International Trade"
, in Economics and Finance, 12-2024
Original Titel:
Multiproduct Firms in International Trade
Sprache des Titels:
Englisch
Original Kurzfassung:
Starting in the late 2000s, a growing body of theoretical and empirical research has highlighted the significant role of multiproduct firms (MPFs) in international trade. Evidence from transaction-level data across various countries has shown that international trade flows are predominantly controlled by a few large multiproduct exporters, a concentration that has increased over time. Motivated by this empirical evidence, theoretical research has explored how firms determine the range of products for their domestic and export markets. Varieties produced by MPFs may be linked on both the demand side and the supply side. Demand linkages, often referred to as the ?cannibalization effect,? imply a reduction in sales of an existing product due to the introduction of a new product by the same company. Supply linkages may arise from shared inputs, economies of scale and scope, and related production processes across varieties within the firm. These effects are specific to MPFs, and studying them generates novel insights compared to conventional models with single-product producers. New modeling techniques on product asymmetries within firms allow researchers to examine the internal adjustments in response to external shocks such as trade liberalization. Asymmetries among products not only determine how individual varieties are affected by the opportunities and threats of globalization but also influence the range of countries to which they are exported. Research has shown that firms frequently adjust their product mix across export destinations based on trade costs and the degree of competition in each market. Newly available transaction data, containing information at the firm-product-destination level, has made it possible to test new predictions specific to MPFs. These insights contribute to the understanding of adjustment processes within firms and how individual firms? decisions impact aggregate outcomes such as product variety and productivity.
Subjects: Industrial Organization, International Economics. Keywords: survey, multiproduct firms, international economics, theory, empirics
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