Demand & Supply Side Linkages in Exporting Multiproduct Firms

The Growth Lab's Research Seminar series is a weekly seminar that brings together researchers from across the academic spectrum who share an interest in growth and development.

Speaker: Lisandra Flach, Professor of Economics at Ludwig-Maximilians-Universität München (LMU Munich) and Director of the ifo Center for International Economics

Whether attending in person or virtually, please register in advance.

Abstract:

Products produced by a multiproduct firm can be linked through demand linkages or supply linkages. On the demand side, changes in the price of one product can affect the demand for a firm's other products through shifts in consumer expenditures. This is commonly referred to as the cannibalization effect. On the supply side, joint inputs can create a dependency of one product's marginal costs on the output of other products. The existence of these linkages is important for how firms respond to shocks and has major implications for several performance measures, such as productivity and markups. This paper provides the first empirical evidence for the existence of cannibalization linkages in the presence of supply linkages, which is implied evidence for market power.

Link to the paper:

https://cepr.org/publications/dp18627

Bio:

Lisandra Flach is a Professor of Economics at Ludwig-Maximilians-Universität München (LMU Munich) and Director of the ifo Center for International Economics. Her research focuses on international trade, firm dynamics, and global value chains, with a particular interest in the effects of trade policy. She is a Research Fellow at CESifo, a Research Affiliate at CEPR, and serves as an Associate Editor for leading economic journals. Her work has been widely recognized, earning her awards such as the "Top 40 under 40" and "Germany’s 10 Most Promising Young Economists."