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Product Choice and Market Competition: The Case of Multiproduct Electronic Plants in Taiwan

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  • Bee Yan Aw
  • Yi Lee
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    Abstract

    We examine the strategies of multiproduct plants in the Taiwanese electronics sector by introducing two new measures of product dissimilarity to capture the technological gaps of product pairs within the plant. The plant-level index is used to analyze product mix decisions of plants. We find that plants whose products have large technological gaps are more likely to give up product lines. The product-level index is used to show that, with increased competition, multiproduct plants exit markets where production technologies are farthest away from their core products and they also perform better than plants that continue to produce a wider range of products. Copyright The editors of the "Scandinavian Journal of Economics" 2009 .

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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.

    Volume (Year): 111 (2009)
    Issue (Month): 4 (December)
    Pages: 711-740

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    Handle: RePEc:bla:scandj:v:111:y:2009:i:4:p:711-740

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    Web page: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442

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    Cited by:
    1. Veerle Miranda & Marialuz Moreno Badia & Ilke Van Beveren, 2012. "Globalization drives strategic product switching," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 148(1), pages 45-72, April.
    2. Söderbom, Måns & Weng, Qian, 2012. "Multi-product firms, product mix changes and upgrading: Evidence from China's state-owned forest areas," China Economic Review, Elsevier, vol. 23(4), pages 801-818.
    3. Nakhoda, Aadil, 2012. "The effect of foreign competition on product switching activities: A firm level analysis," MPRA Paper 39167, University Library of Munich, Germany.

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