Papers Containing Keywords(s): 'product'
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Viewing papers 1 through 10 of 39
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Working PaperInvestigating the Effect of Innovation Activities of Firms on Innovation Performance: Does Firm Size Matter?
January 2025
Working Paper Number:
CES-25-04
Understanding the relationship between a firm's innovation activities and its performance has been of great interest to management scholars. While the literature on innovation activities is vast, there is a dearth of studies investigating the effect of key innovation activities of the firm on innovation outcomes in a single study, and whether their effects are dependent on the nature of firms, specifically firm size. Drawing from a longitudinal dataset from the Business Research & Development and Innovation Survey (BRDIS), and informed by contingency theory and resource orchestration theory, we examine the relationship between a firm's innovation activities - including its Research & Development (R&D) investment, securing patents, collaborative R&D, R&D toward new business areas, and grants for R&D - and its product innovation and process innovation. We also investigate whether these relationships are contingent on firm size. Consistent with contingency theory, we find a significant difference between large firms and small firms regarding how they enhance product innovation and process innovation. Large firms can improve product innovation by securing patents through applications and issuances, coupled with active participation in collaborative R&D efforts. Conversely, smaller firms concentrate their efforts on the number of patents applied for, directing R&D efforts toward new business areas, and often leveraging grants for R&D efforts. To achieve process innovation, a similar dichotomy emerges. Larger firms demonstrate a commitment to securing patents, engage in R&D efforts tailored to new business areas, and actively collaborate with external entities on R&D efforts. In contrast, smaller firms primarily focus on securing patents and channel their R&D efforts toward new business pursuits. This nuanced exploration highlights the varied strategies employed by large and small firms in navigating the intricate landscape of both product and process innovation. The results shed light on specific innovation activities as antecedents of innovation outcomes and demonstrate how the effectiveness of such assets is contingent upon firm size.View Full Paper PDF
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Working PaperAccounting for Trade Patterns
February 2024
Working Paper Number:
CES-24-07
We develop a quantitative framework for decomposing trade patterns. We derive price indexes that determine comparative advantage and the aggregate cost of living. If firms and products are imperfect substitutes, we show that these price indexes depend on variety, average appeal (including quality), and the dispersion of appeal-adjusted prices. We show that they are only weakly related to standard empirical measures of average prices. We find that 40 percent of the cross-section variation in comparative advantage, and 90 percent of the time-series variation, is accounted for by variety and average appeal, with less than 10 percent attributed to average prices.View Full Paper PDF
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Working PaperQuality Adjustment at Scale: Hedonic vs. Exact Demand-Based Price Indices
June 2023
Working Paper Number:
CES-23-26
This paper explores alternative methods for adjusting price indices for quality change at scale. These methods can be applied to large-scale item-level transactions data that in cludes information on prices, quantities, and item attributes. The hedonic methods can take into account the changing valuations of both observable and unobservable charac teristics in the presence of product turnover. The paper also considers demand-based approaches that take into account changing product quality from product turnover and changing appeal of continuing products. The paper provides evidence of substantial quality-adjustment in prices for a wide range of goods, including both high-tech consumer products and food products.View Full Paper PDF
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Working PaperOn The Role of Trademarks: From Micro Evidence to Macro Outcomes
March 2023
Working Paper Number:
CES-23-16R
What are the effects of trademarks on the U.S. economy? Evidence from comprehensive micro data on trademark registrations and outcomes for U.S. employer firms suggests that trademarks protect firm value and are linked to higher firm growth and marketing activity. Motivated by this evidence, trademarks are introduced in a general equilibrium framework to quantify their aggregate effects. Firms invest in product quality and engage in both informative and persuasive advertising to build a customer base subject to depreciation. Persuasive advertising induces a perception of higher quality. Firms can register trademarks to reduce customer depreciation and enhance product awareness. The model's predictions about trademark registrations, firm growth, and advertising expenditures align with the empirical evidence. The analysis shows that, compared to the counterfactual economy without trademarks, the U.S. economy with trademarks generates higher average product quality but lower variety, ultimately resulting in greater welfare and higher industry concentration. While informative advertising improves welfare, persuasive advertising reduces it. Nevertheless, the positive welfare impact of trademarks outweighs the negative effects of persuasive advertising.View Full Paper PDF
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Working PaperThe Evolution of U.S. Retail Concentration
March 2022
Working Paper Number:
CES-22-07
Increases in national concentration have been a salient feature of industry dynamics in the U.S. and have contributed to concerns about increasing market power. Yet, local trends may be more informative about market power, particularly in the retail sector where consumers have traditionally shopped at nearby stores. We find that local concentration has increased almost in parallel with national concentration using novel Census data on product-level revenue for all U.S. retail stores. The increases in concentration are broad based, affecting most markets, products, and retail industries. We implement a new decomposition of the national Herfindahl Hirschman Index and show that despite similar trends, national and local concentration reflect different changes in the retail sector. The increase in national concentration comes from consumers in different markets increasingly buying from the same firms and does not reflect changes in local market power. We estimate a model of retail competition which links local concentration to markups. The model implies that the increase in local concentration explains one-third of the observed increase in markups.View Full Paper PDF
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Working PaperRecall and Response: Relationship Adjustments to Adverse Information Shocks
March 2020
Working Paper Number:
CES-20-13R
How resilient are U.S. buyer-foreign supplier relationships to new information about product defects? We construct a novel dataset of U.S. consumer-product recalls sourced from foreign suppliers between 1995 and 2013. Using an event-study approach, we find that compared to control relationships, buyers that experience recalls temporarily reduce their probability of trading with the suppliers of the recalled products by 17%. The reduction is much larger for new than established buyer'supplier relationships. Buyers that experience a recall are more likely to add other suppliers to their portfolios, diversifying supplier-specific risk in the aftermath of a recall; this effect, too, is larger for buyers impacted by recalls in new relationships. There is a long lag ' up to two years ' before diversification, consistent with a high cost of establishing new relationships.View Full Paper PDF
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Working PaperUpstream, Downstream: Diffusion and Impacts of the Universal Product Code
January 2017
Working Paper Number:
CES-17-66R
We study the adoption, diffusion, and impacts of the Universal Product Code (UPC) between 1975 and 1992, during the initial years of the barcode system. We find evidence of network effects in the diffusion process. Matched-sample difference-in-difference estimates show that firm size and trademark registrations increase following UPC adoption by manufacturers. Industry-level import penetration also increases with domestic UPC adoption. Our findings suggest that barcodes, scanning, and related technologies helped stimulate variety-enhancing product innovation and encourage the growth of international retail supply chains.View Full Paper PDF
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Working PaperPirate's Treasure
January 2017
Working Paper Number:
CES-17-51
Do countries that improve their protection of intellectual property rights gain access to new product varieties from technologically advanced countries? We build the first comprehensive matched firm level data set on exports and patents using confidential microdata from the US Census to address this question. Across several different estimation approaches we find evidence that these protections affect where US firms export.View Full Paper PDF
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Working PaperEstimating market power Evidence from the US Brewing Industry
January 2017
Working Paper Number:
CES-17-06R
While inferring markups from demand data is common practice, estimation relies on difficult-to-test assumptions, including a specific model of how firms compete. Alternatively, markups can be inferred from production data, again relying on a set of difficult-to-test assumptions, but a wholly different set, including the assumption that firms minimize costs using a variable input. Relying on data from the US brewing industry, we directly compare markup estimates from the two approaches. After implementing each approach for a broad set of assumptions and specifications, we find that both approaches provide similar and plausible markup estimates in most cases. The results illustrate how using the two strategies together can allow researchers to evaluate structural models and identify problematic assumptions.View Full Paper PDF
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Working PaperHow Destructive is Innovation?
January 2017
Working Paper Number:
CES-17-04
Entrants and incumbents can create new products and displace the products of competitors. Incumbents can also improve their existing products. How much of aggregate productivity growth occurs through each of these channels? Using data from the U.S. Longitudinal Business Database on all non-farm private businesses from 1976'1986 and 2003'2013, we arrive at three main conclusions: First, most growth appears to come from incumbents. We infer this from the modest employment share of entering firms (defined as those less than 5 years old). Second, most growth seems to occur through improvements of existing varieties rather than creation of brand new varieties. Third, own-product improvements by incumbents appear to be more important than creative destruction. We infer this because the distribution of job creation and destruction has thinner tails than implied by a model with a dominant role for creative destruction.View Full Paper PDF
