TY  - BOOK
AU  - Carvalho,Carlos
TI  - Extensive Margin Adjustment of Multi-Product Firm and Risk Diversification
T2  - IMF Working Paper
SN  - 1484303768
AV  - HG3810 .I45
U1  - 338.52 23
PY  - 2017///]
CY  - [Washington, D.C.]
PB  - International Monetary Fund
KW  - Asset Pricing
KW  - imf
KW  - Business Objectives Of The Firm
KW  - Firm Performance: Size, Diversification, And Scope
KW  - Size Distribution Of Firms
KW  - Prices
KW  - Econometric models
KW  - Capital assets pricing model
KW  - Risk management
KW  - Electronic books
N1  - 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
N2  - 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
UR  - https://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=1555981
ER  -