TY  - JOUR
AU  - Bernard,Andrew B.
AU  - Redding,Stephen J.
AU  - Schott,Peter K.
TI  - Multi-Product Firms and Product Switching
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12293
PY  - 2006
Y2  - June 2006
UR  - http://www.nber.org/papers/w12293
L1  - http://www.nber.org/papers/w12293.pdf
N1  - Author contact info:
Andrew B. Bernard
Tuck School of Business at Dartmouth
100 Tuck Hall
Hanover, NH  03755
Tel: 603/646-0302
Fax: 603/646-0995
E-Mail: Andrew.B.Bernard@dartmouth.edu

Stephen J. Redding
Department of Economics
and Woodrow Wilson School
Princeton University
Fisher Hall
Princeton, NJ 08544
Tel: 609/258-4016
Fax: 609/258-6419
E-Mail: reddings@princeton.edu

Peter K. Schott
Yale School of Management
135 Prospect Street
New Haven, CT 06520-8200
Tel: 203/436-4260
Fax: 203/432-6974
E-Mail: peter.schott@yale.edu
M2  - featured in NBER digest on 2006-06-12
AB  - This paper examines the frequency, pervasiveness and determinants of product switching among U.S. manufacturing firms. We find that two-thirds of firms alter their mix of five-digit SIC products every five years, that one-third of the increase in real U.S. manufacturing shipments between 1972 and 1997 is due to the net adding and dropping of products by survivors, and that firms are more likely to drop products which are younger and have smaller production volumes relative to other firms producing the same product. The product-switching behavior we observe is consistent with an extended model of industry dynamics emphasizing firm heterogeneity and self-selection into individual product markets. Our findings suggest that product switching contributes towards a reallocation of economic activity within firms towards more productive uses.
ER  -