Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/210782
Authors: 
Chernoff, Alex W.
Year of Publication: 
2019
Series/Report no.: 
Bank of Canada Staff Working Paper 2019-42
Abstract: 
I use firm-product-level data for Canadian online retailers to study how product scope (the average number of product categories per firm) evolved from 1999 to 2012. During this period, product scope dropped monotonically from 59 to 5 product categories. Using a theoretical model of multi-product firms, I show that this reduction can be rationalized by increased online competition. Consistent with the model, I find that the percentage of Canadian online retailers with revenues in a product category falls when Amazon.com expands its varieties in the category. Overall, Amazon.com's expansion accounts for 37 percent of the observed reduction in product scope.
Subjects: 
Firm dynamics
Service sector
JEL: 
D22
L11
L81
Document Type: 
Working Paper

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