The Extent and Nature of Establishment-Level Diversification in Sixteen U. S. Manufacturing Industries

Streitwieser, Mary L.

doi:10.1086/467234

Cited by 19 publications

(10 citation statements)

References 4 publications

(1 reference statement)

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“…The bottom line is that the bulk of output in these sectors is produced by firms marketing hundreds of different products under dozens of brands in a variety of markets. While this is consistent with previous work that has documented the extent of industry diversification in U.S. firms or plants (e.g., Streitweiser (1991), Jovanovic (1993) and Bernard, et al (2006)), aggregation up to the firm level results in a substantial loss of information about the process of creative destruction. 18 As we will see below, most of the product entry and exit happen within existing firms.…”

Section: Stylized Fact 1: the Importance Of Multi-product Firmssupporting

confidence: 91%

Product Creation and Destruction: Evidence and Price Implications

Broda

Weinstein

2010

American Economic Review

369

215

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This paper describes the extent and cyclicality of product creation and destruction in a large sector of the U.S. economy and quantifies its implications for the measurement of consumer prices. We find four times more entry and exit in product markets than is typically found in labor markets because most product turnover happens within the boundaries of the firm. Net product creation is strongly pro-cyclical, but contrary to the behavior of labor flows, it is primarily driven by creation rather than destruction. High rates of innovation are also accompanied by substantial price volatility of products. These facts suggest that the CPI deviates from a true cost-of-living index in three important dimensions. The quality bias that arises as new goods replace outdated ones causes the CPI to overstate inflation by 0.8 percent per year; the cyclicality of the bias implies that business cycles are more volatile than indicated by official statistics; and finally, sampling error is sufficiently large that over the last 10 years policymakers could not statistically distinguish whether quarterly inflation was accelerating or decelerating 65 percent of the time.

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Section: Stylized Fact 1: the Importance Of Multi-product Firmssupporting

confidence: 91%

Product Creation and Destruction: Evidence and Price Implications

Broda

Weinstein

2010

American Economic Review

369

215

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“…For example, Baily et al (1992) found that plants' productivity has an associated 'firm' effect. As another example, Streitwieser (1991) found that plants classified in the same industry, on the basis of their primary product, differ substantially in their mix of secondary products. Exploiting the fact that many of the plants in the sample were part of multi-unit firms, she found evidence that these differences in the secondary products produced by manufacturing plants could be explained by the plant's ownership structure.…”

Section: Firm Effectsmentioning

confidence: 99%

Firm Performance and Evolution: Empirical Regularities in the US Microdata

Jensen

Mcguckjn

1997

Industrial and Corporate Change

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This paper explores what we know and bow we think about firm performance, firm and industry evolution, and economic growth. It reports empirical findings from a new literature that focuses explicitly on individual business units. In contrast to traditional empirical studies of competition and economic growth that examine aggregate economic variables such as industry or regional productivity, this new work concentrates on differences in the behavior of firms and their business units. The results emerging from these analyses confirm the importance of microeconomic approaches to economic research and place the firm at the center of economic growth. ' A related factor ii that molt economists simply did not think that the biases inherent in misspecified industry-and economy-wide modelj were very large. Of count, in the absence of access to the microdata, there was simply no other alternative than to use the aggregative data. ' See McGuckin and Pascoe (1988) for a description of the LRD. Research with the LRD is described in McGuckin (1995), McGuckin and Reinek (1993) and the annual reports of the CES.

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“…24. To the best of our knowledge, the only extant study that distinguishes between multiplant and uniplant firms (though not following an econometric methodology) is the paper by Streitwieser (1991).…”

Section: Discussionmentioning

confidence: 99%