- Product Switching within Multiproduct Firms
- Diyue Guo
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- I explore the within-firm product dynamics beyond the product scope changes. The measures of interest include within-firm product entry, exit, net entry and reallocation. The net entry is related to the product scope changes and is expected to be procyclical. The reallocation is an important channel for endogenous growth. To investigate the cyclicality of these measures and locate the firm-level factors that affect the within-firm product dynamics, I combine the Nielsen Retail Scanner data with the Compustat fundamental data for the listed firms, by matching the firm names. The listed Nielsen firms have lower net entry and reallocation rates in the recession years. The regressions of the net entry and reallocation rates on the unemployment rate reveal that the net entry is significantly procyclical on average and the reallocation is not. Moreover, firms' financial constraint condition and R&D significantly affect the reallocation, but not the net entry.
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