Multi-product firms at home and away: Cost- versus quality-based competence.
We develop a new model of multi-product firms which invest to improve both the quality of their individual products and of their brand. Because of flexible manufacturing, products closer to firms’ core competence have lower costs, so they produce more of them, and also have higher incentives to inv...
| Main Authors: | , , , |
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| Format: | Working paper |
| Jezik: | English |
| Izdano: |
Department of Economics (University of Oxford)
2010
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| _version_ | 1826258585115426816 |
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| author | Javorcik, B Neary, J Eckel, C Iacovone, L |
| author_facet | Javorcik, B Neary, J Eckel, C Iacovone, L |
| author_sort | Javorcik, B |
| collection | OXFORD |
| description | We develop a new model of multi-product firms which invest to improve both the quality of their individual products and of their brand. Because of flexible manufacturing, products closer to firms’ core competence have lower costs, so they produce more of them, and also have higher incentives to invest in their quality. These two effects have opposite implications for the profile of prices. Mexican data provide robust confirmation of the model’s key prediction: firms in differentiated-good sectors exhibit quality-based competence (prices fall with distance from core competence), but export sales of firms in non-differentiated-good sectors exhibit the opposite. |
| first_indexed | 2024-03-06T18:36:18Z |
| format | Working paper |
| id | oxford-uuid:0b5a8a74-e147-49ca-8e6f-b6ef8b3ac420 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-06T18:36:18Z |
| publishDate | 2010 |
| publisher | Department of Economics (University of Oxford) |
| record_format | dspace |
| spelling | oxford-uuid:0b5a8a74-e147-49ca-8e6f-b6ef8b3ac4202022-03-26T09:28:56ZMulti-product firms at home and away: Cost- versus quality-based competence.Working paperhttp://purl.org/coar/resource_type/c_8042uuid:0b5a8a74-e147-49ca-8e6f-b6ef8b3ac420EnglishDepartment of Economics - ePrintsDepartment of Economics (University of Oxford)2010Javorcik, BNeary, JEckel, CIacovone, LWe develop a new model of multi-product firms which invest to improve both the quality of their individual products and of their brand. Because of flexible manufacturing, products closer to firms’ core competence have lower costs, so they produce more of them, and also have higher incentives to invest in their quality. These two effects have opposite implications for the profile of prices. Mexican data provide robust confirmation of the model’s key prediction: firms in differentiated-good sectors exhibit quality-based competence (prices fall with distance from core competence), but export sales of firms in non-differentiated-good sectors exhibit the opposite. |
| spellingShingle | Javorcik, B Neary, J Eckel, C Iacovone, L Multi-product firms at home and away: Cost- versus quality-based competence. |
| title | Multi-product firms at home and away: Cost- versus quality-based competence. |
| title_full | Multi-product firms at home and away: Cost- versus quality-based competence. |
| title_fullStr | Multi-product firms at home and away: Cost- versus quality-based competence. |
| title_full_unstemmed | Multi-product firms at home and away: Cost- versus quality-based competence. |
| title_short | Multi-product firms at home and away: Cost- versus quality-based competence. |
| title_sort | multi product firms at home and away cost versus quality based competence |
| work_keys_str_mv | AT javorcikb multiproductfirmsathomeandawaycostversusqualitybasedcompetence AT nearyj multiproductfirmsathomeandawaycostversusqualitybasedcompetence AT eckelc multiproductfirmsathomeandawaycostversusqualitybasedcompetence AT iacovonel multiproductfirmsathomeandawaycostversusqualitybasedcompetence |