Bernard, Andrew B.; Redding, Stephen J.; Schott, Peter K. - C.E.P.R. Discussion Papers - 2003
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 … theoretical model incorporates heterogeneous firms, heterogeneous products, and ongoing entry and exit. In equilibrium, firm …