Demand and Supply Side Linkages in Exporting Multiproduct Firms

Arbeitspapier

Products produced by a multiproduct firm can be linked through demand linkages or supply linkages. On the demand side, changes in the price of one product can affect the demand for a firm's other products through shifts in consumer expenditures. This is commonly referred to as the cannibalization effect. On the supply side, joint inputs can create a dependency of one product's marginal costs on the output of other products. The existence of these linkages is important for how firms respond to shocks and has major implications for several performance measures, such as productivity and markups. This paper provides first empirical evidence for the existence of cannibalization linkages in presence of supply linkages, which is implied evidence for market power.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Paper ; No. 456

Classification and Topics

• Classification: Wirtschaft ; Firm Behavior: Theory ; Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Trade Policy; International Trade Organizations ; Empirical Studies of Trade ; Production, Pricing, and Market Structure; Size Distribution of Firms ; Information and Product Quality; Standardization and Compatibility ; Firm Performance: Size, Diversification, and Scope
• Subject: multiproduct firms ; cannibalization effect ; demand linkages ; supply linkages ; anti-dumping tariffs ; quality ; mark-ups

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Eckel, Carsten ; Flach, Lisandra ; Meng, Ning
• Event: Veröffentlichung
• (who): Ludwig-Maximilians-Universität München und Humboldt-Universität zu Berlin, Collaborative Research Center Transregio 190 - Rationality and Competition
• (where): München und Berlin
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/282147
• Last update: 10.03.2025, 11:45 AM CET