This Paper develops a model of endogenous product selection by firms. The theory is motivated by new evidence we present on the importance of product switching by US manufacturers. Two-thirds of continuing firms change their product mix every five years, and product switches involve more than...

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...

Firms’ decisions about which goods to produce are often made at a more disaggregate level than the data observed by empirical researchers. When products differ according to production technique or the way in which they enter demand, this data aggregation problem introduces a bias into standard...

In most transition countries the aggregate level evidence suggests that most industries are just destroying jobs, due to the legacy of communism where over-manning levels of employment were the norm. This Paper sheds light on whether the transition process in Slovenian manufacturing has been one...

Using a stochastic frontier model and a comprehensive dataset, we study factors that affect corporate efficiency in Europe. We find that (i) larger firms are less efficient than smaller firms, (ii) greater leverage contributes to corporate efficiency, and (iii) high competition is less...

We simultaneously assess the contributions to productivity of three sources of research and development spillovers: geographic, technology and product–market proximity. To do this, we construct a new measure of geographic proximity that is based on the distribution of a firm’s inventor...

How many cartels are there? The answer is important in assessing the efficiency of competition policy. We present a Hidden Markov Model that answers the question, taking into account that often we do not know whether a cartel exists in an industry or not. Our model identifies key policy...

Using input-output and world price data, this study computes domestic resource costs (DRCs) for branches of manufacturing industry in Bulgaria, Czechoslovakia, Hungary, Poland and the former Soviet Union. The results show a wide dispersion of DRCs in each country, including branches with...

This Paper presents an empirical study of the effect of foreign multinational companies on the development of indigenous firms in the host country. Our starting point is a recent paper by Markusen and Venables (1999) that shows formally that multinationals, through the creation of linkages with...