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Multi-product firms, product mix changes and upgrading: Evidence from China's state-owned forest areas

Rapport
Författare Måns Söderbom
Qian Weng
Förlag University of Gothenburg
Förlagsort Göteborg
Publiceringsår 2012
Publicerad vid Institutionen för nationalekonomi med statistik
Språk en
Länkar hdl.handle.net/2077/28585
Ämnesord multi-product firms, product mix changes, product upgrading, firm characteristics, China's state-owned forest areas
Ämneskategorier Nationalekonomi

Sammanfattning

Product selection matters for a firm’s productivity and long-run growth. Recent theoretical and empirical studies indicate that an important margin of adjustment to policy reforms is the reallocation of output within firms through changes in product mix decisions. This paper examines the frequency, pervasiveness and determinants of product switching and upgrading activities in firms located in China’s state-owned forest areas during a period of gradual institutional and managerial reforms (2004-2008). We find that changes to the product mix are pervasive and characterized by adding or churning products rather than only shedding products. Moreover, changes in firms’ product mix have made a significant contribution to the aggregate output growth during our sample period. We also find that firms with different characteristics, human capital and market conditions differ in their propensity to diversify and upgrade product mix.

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