Firms in product space: adoption, growth and competition

Macedoni, Luca, Morrow, John and Tyazhelnikov, Vladimir (2024) Firms in product space: adoption, growth and competition. CEP Discussion Papers (CEPDP1978). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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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 growth, scope growth and core focus. If all firms produced all products linked by co-production, consumer welfare would increase by 10-30%.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://cep.lse.ac.uk/_new/publications/discussion...
Additional Information:	© 2024 The Author(s)
Divisions:	Economics
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HB Economic Theory H Social Sciences > HF Commerce
JEL classification:	F - International Economics > F1 - Trade D - Microeconomics > D2 - Production and Organizations L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L23 - Organization of Production L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L25 - Firm Performance: Size, Diversification and Scope, Age, Profit, and Sales
Date Deposited:	19 Feb 2025 16:48
Last Modified:	19 Feb 2025 17:18
URI:	http://eprints.lse.ac.uk/id/eprint/126833

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