TY  - JOUR
AU  - Brambilla,Irene
TI  - Multinationals, Technology, and the Introduction of Varieties of Goods
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12217
PY  - 2006
Y2  - May 2006
UR  - http://www.nber.org/papers/w12217
L1  - http://www.nber.org/papers/w12217.pdf
N1  - Author contact info:
Irene Brambilla
Calle 6 entre 47 y 48
Departamento de Economía
Universidad Nacional de La Plata
Argentina
Tel: +54-221-4229383
Fax: +54-221-4229383
E-Mail: irene.brambilla@econo.unlp.edu.ar
M2  - featured in NBER digest on 2006-05-15
AB  - Multiproduct firms and product turnover are widespread phenomena. This paper develops a theoretical framework that links advantages in R&D and variable costs with firm's ability to expand its portfolio of products. The framework is then applied to explain systematic differences in product introduction by affiliates of multinationals and firms that only operate domestically. Using firm-level data for the Chinese manufacturing sector during 1998-2000, I compare the performance of foreign and domestic firms in terms of the new varieties that they introduce and I estimate the quantitative relevance of technological factors as a determinant.

I find that firms with more than 50 percent of foreign ownership introduce on average more than twice as many more new varieties of goods as private domestic firms. Advantages in productivity account for 32 to 62 percent of the difference in the number and sales of new varieties, while advantages in the cost of development account for 3 to 6 percent of these differences.
ER  -