Product Differentiation and Firm Size Distribution: An Application to Carbonated Soft Drinks

46 Pages Posted: 11 Jul 2008

See all articles by Patrick Paul Walsh

Patrick Paul Walsh

UCD; Institute for the Study of Labor (IZA)

Ciara Whelan

University College Dublin

Date Written: August 2002

Abstract

Using brand-level retail data, the firm size distribution in carbonated soft drinks is shown to be an outcome of the degree to which firms have placed brands effectively (store coverage) across vertical (flavour, packaging, diet attributes) segments of the market. Regularity of the firm size distribution is not disturbed by the nature of short-run brand competition (turbulence in brand market share) within segments. Remarkably, product differentiation resulting from firms acquiring various portfolios of product attributes and stores in market evolution determines the limiting firm size distribution.

Suggested Citation

Walsh, Patrick Paul and Whelan, Ciara, Product Differentiation and Firm Size Distribution: An Application to Carbonated Soft Drinks (August 2002). LSE STICERD Research Paper No. EI31, Available at SSRN: https://ssrn.com/abstract=1158308

Patrick Paul Walsh (Contact Author)

UCD ( email )

University College Dublin
Belfield, Dublin Dublin 4
Ireland

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Ciara Whelan

University College Dublin ( email )

Belfield
Belfield, Dublin 4 4
Ireland