Extensive Margin Adjustment of Multi-Product Firm and Risk Diversification. [electronic resource] / Carlos Carvalho.

By:

Carvalho, Carlos [author.]

Material type: Text

text

Media type:

computer

Carrier type:

online resource

ISBN:

1484303768
9781484303764
1484307046
9781484307045

Subject(s):

Genre/Form:

Electronic books.

Additional physical formats: Print Version:: Extensive Margin Adjustment of Multi-Product Firm and Risk Diversification.DDC classification:

338.52 23

LOC classification:

HG3810 .I45

Online resources:

EBSCOhost

Contents:

Cover; Table of Contents; 1 Introduction; 2 The Relationship between Extensive Margin Adjustment and Asset Price Under CCAPM; 3 Data Description; 4 Empirical Findings; 4.1 Extensive Margin Adjustment Rate is Sticky -- 4.2 Comparison between High vs Low Product Turnover Groups; 4.3 Portfolio Analysis; 4.4 Extensive margin Adjustment and Risk; 4.5 Robustness Check; 5 A Dynamic Model of Extensive Margin Adjustment; 5.1 Household; 5.2 Price of the Product; 5.3 Firm's Decision on Optimal Product Scope: Without Friction; 5.4 Firm's Decision on Optimal Product Scope: A Calvo-type Model.

5.5 Model Summary5.6 Return Rate; 5.7 Parametrization; 5.8 Simulation; 6 Conclusion; References; Appendix.

Abstract: 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.

Holdings ( 1 )
Title notes ( 5 )

Holdings
Item type	Current library	Collection	Call number	Status	Date due	Barcode	Item holds
eBook	e-Library	EBSCO Business		Available

Total holds: 0

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.

Print version record.

5.5 Model Summary5.6 Return Rate; 5.7 Parametrization; 5.8 Simulation; 6 Conclusion; References; Appendix.

Master record variable field(s) change: 050, 082, 650 - OCLC control number change