Boehm, Johannes, Dhingra, Swati and Morrow, John (2016) Swimming upstream: input-output linkages and thedirection of product adoption. CEP Discussion Paper (1407). London School of Economics and Political Science. Centre for Economic Performance, London, UK.
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Abstract
Multiproduct firms dominate production, and their product turnover contributes substantially to aggregate growth. Firms continually adapt their product mix, but what determines which products firms expand into? Theories of the firm propose that mulitproduct firms choose to make products which need the same know-how or inputs that can't be bought ‘off the shelf’. We empirically examine this rationale by testing for firm-level capabilities that are shared across products and manifested through input-output (IO) linkages. We show that a firm's idiosyncratic horizontal and vertical similarity to a product's IO structure predicts product adoption. Using product-specific policy changes for a firm's inputs and outputs, we show that input linkages are the most important, suggesting that firms' product capabilities depend more on economies of scope rather than product market complementarities.
| Item Type: | Monograph (Discussion Paper) |
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| Official URL: | http://cep.lse.ac.uk/ |
| Additional Information: | © 2016 The Authors |
| Divisions: | Economics Centre for Economic Performance |
| Subjects: | H Social Sciences > HB Economic Theory H Social Sciences > HC Economic History and Conditions |
| Date Deposited: | 09 May 2016 14:17 |
| Last Modified: | 15 Sep 2023 23:38 |
| Funders: | Economic and Social Research Council, Economic and Social Research Council |
| URI: | http://eprints.lse.ac.uk/id/eprint/66418 |
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