Hidden Bibliographic Details
| ISBN: | 1484303768
9781484303764
9781484303764
1484307046
9781484307045
|
|---|
| Notes: | Print version record.
|
|---|
| Summary: | Product scope adjustment is a key mechanism through which multi-product firms achieve efficient resource allocations. In this paper, we take a novel perspective to study firms' product scope adjustment behavior through the lens of asset pricing. Using a unique panel scanner data set containing detailed information on products, matched with the financial information of their manufacturers, we find that multi-product firms with higher product turnover have lower financial risks and lower risk premia. To understand this channel, we propose a stylized model with a time-dependent (Calvo-type) product turnover rate to highlight the 'risk absorption channel' of product scope adjustment. In response to an economy-wide shock, a firm that can adjust its product scope more flexibly shows lower excess equity returns and lower asset volatility.
|
|---|
| Other form: | Print Version: Carvalho, Carlos. Extensive Margin Adjustment of Multi-Product Firm and Risk Diversification. Washington, D.C. : International Monetary Fund,2017 9781484303764
|
|---|
| Standard no.: | 10.5089/9781484303764.001
|
|---|
