Multi-Product Firms and Product Switching in Japan

26 Pages Posted: 1 Nov 2013

See all articles by Andrew B. Bernard

Andrew B. Bernard

Dartmouth College - Tuck School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Toshihiro Okubo

Keio University

Date Written: July 30, 2013

Abstract

This paper explores role of multi-product plants and product switching in the Japanese manufacturing sector. While a substantial body of work has explored the importance of the extensive margins of plant entry and exit in employment and output flows, only recently has research begun to examine the adjustment across products within establishments and its importance for plant and aggregate output and employment flows. Using a novel, annual plant-product data set covering all Japanese manufacturing plants with more than 4 employees from 1992 to 2006, we provide the first evidence on the role of multi-product plants in Japanese manufacturing and how the product mix and the plant mix have changed over time. Unlike previous studies we are able to track annual changes in the product mix. The period covers a major decline in manufacturing activity and we show that the mix of products and output shifted strongly towards larger multi-product plants that are part of multi-establishment manufacturing firms.

Keywords: product adding, product dropping, multi-product plants, multi-plant firms

JEL Classification: L11, L21, L25, L60

Suggested Citation

Bernard, Andrew B. and Okubo, Toshihiro, Multi-Product Firms and Product Switching in Japan (July 30, 2013). Tuck School of Business Working Paper. Available at SSRN: https://ssrn.com/abstract=2347668 or http://dx.doi.org/10.2139/ssrn.2347668

Andrew B. Bernard (Contact Author)

Dartmouth College - Tuck School of Business ( email )

100 Tuck Hall
Hanover, NH 03755
United States
603-646-0302 (Phone)
603-646-9084 (Fax)

HOME PAGE: http://mba.tuck.dartmouth.edu/pages/faculty/Andrew.Bernard/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Toshihiro Okubo

Keio University ( email )

2-15-45 Mita
Minato-ku
Tokyo, 108-8345
Japan

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