Trejos Medina, Andres Felipe;
(2025)
Dynamic comparative advantages and product diversification.
Doctoral thesis (Ph.D), UCL (University College London).
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Abstract
This thesis explores empirically and theoretically the determinants of the process of product addition at the firm level. This process is relevant because it is the main driver of product switching, which has been found to be a key source of economic efficiency. This thesis consists of three chapters, which are sequentially connected, although each of them is a self-contained research paper. In chapter one I present new empirical evidence about the process of product addition at the firm level by using a detailed dataset of Colombian manufacturing firms from 1992 to 2017. My main finding is that the products that require an input mix that is more similar to the input mix currently used by a firm are more likely to be added by such firm in the future, even 3 years ahead, and that this correlation between the similarity in the input mix and the probability of product addition is larger for firms with more skilled labour. In Chapter 2 I present a model that rationalizes this main finding from chapter 1, among other findings. This model features key input-related characteristics that make some new products more profitable for firms than others. It focuses on the evolution of firm-input-specific productivities that determine what potential new products are chosen by the firms to be produced. This model yields specific propositions about the process of product addition at the firm level. Finally, in Chapter 3 I present empirical evidence that is mostly consistent with these propositions. For this, I use the same dataset as for Chapter 1. Very importantly, I perform an estimation of the structural firm-input-specific productivities in this last chapter, in addition to a causality analysis. For this latter I use an exogeneous reduction in tariffs carried out by the Colombian government in 2011.
| Type: | Thesis (Doctoral) |
|---|---|
| Qualification: | Ph.D |
| Title: | Dynamic comparative advantages and product diversification |
| Open access status: | An open access version is available from UCL Discovery |
| Language: | English |
| Additional information: | Copyright © The Author 2025. Original content in this thesis is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International (CC BY-NC 4.0) Licence (https://creativecommons.org/licenses/by-nc/4.0/). Any third-party copyright material present remains the property of its respective owner(s) and is licensed under its existing terms. Access may initially be restricted at the author’s request. |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10210074 |
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