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• Article | American Economic Journal: Economic Policy | May 2018

  Selection and Market Reallocation: Productivity Gains from Multinational Production

  Laura Alfaro and Maggie X. Chen

  Assessing the productivity gains from multinational production has been a vital topic of economic research and policy debate. Positive aggregate productivity gains are often attributed to within-firm productivity improvement; however, an alternative, less emphasized explanation is between-firm selection and market reallocation, whereby competition from multinationals leads to factor reallocation and the survival of only the most productive domestic firms. We investigate the roles of the two different mechanisms in determining the aggregate productivity gains by exploring their distinct predictions on the distributions of domestic firms: within-firm productivity improvement shifts the productivity and revenue distributions rightward while between-firm selection and market reallocation raise the left truncation of the distributions and shift revenue leftward. Using a rich cross-country firm-level panel dataset, we find significant evidence of both mechanisms, but between-firm selection and market reallocation accounts for the majority of aggregate productivity gains, suggesting that ignoring this channel could lead to substantial bias in understanding the nature of gains from multinational production.

  Keywords: Productivity gains; multinational production; selection; Market Reallocation; and within-firm productivity; Multinational Firms and Management; Production; Performance Productivity; Competition; Mathematical Methods;

  Citation:

  Alfaro, Laura, and Maggie X. Chen. "Selection and Market Reallocation: Productivity Gains from Multinational Production." American Economic Journal: Economic Policy 10, no. 2 (May 2018): 1–38. (Also NBER Working Paper w18207. See Harvard Business School Working Paper, No. 12–111, 2015 for longer version.)  View Details

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• Case | HBS Case Collection | November 2015 (Revised April 2018)

  Flipkart (A): Transitioning to a Marketplace Model

  Das Narayandas, Sunil Gupta and Rachna Tahilyani

  Sachin Bansal and Binny Bansal, co-founders of India's largest e-commerce company, Flipkart, were reviewing the foregoing Facebook post, which had gone viral and received more than 20,000 likes. A third-party seller listed a pair of women's sandals on Flipkart's website at 799 Indian rupees (₹) and offered it on promotion at ₹399. However, upon close examination of the product's display photo, consumers noticed a ₹399 price tag printed on the strap. Consistent with stated goals of transparency and building trusted relationships with customers, the Bansals immediately drafted an apology and terminated the seller's agreement with Flipkart.

  Keywords: marketplaces; online retail; e-commerce; Market Platforms; Online Technology; Corporate Disclosure; Ethics; Retail Industry; India;

  Citation:

  Narayandas, Das, Sunil Gupta, and Rachna Tahilyani. "Flipkart (A): Transitioning to a Marketplace Model." Harvard Business School Case 516-017, November 2015. (Revised April 2018.)  View Details

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• Supplement | HBS Case Collection | April 2018

  Flipkart (B): The Ongoing Battle for India's E-Commerce Market

  Sunil Gupta, Das Narayandas and Rachna Tahilyani

  In 2017, both Flipkart and Amazon claimed leadership position in India's recently concluded key annual festive season sale, but it was too early to declare victory. Amazon continues to invest heavily in India. Competition from newer players is increasing. Media reports hint that Reliance Industries, a large Indian conglomerate, is planning to extend its e-commerce offering beyond fashion to electronics, mobile phones and even groceries. As the battle for India's lucrative e-commerce market gains pace, experts wonder--who will win? Is India a winner-takes-all market or is there space for more than one player?

  Keywords: Market Platforms; Online Technology; Competition; Retail Industry; India;

  Citation:

  Gupta, Sunil, Das Narayandas, and Rachna Tahilyani. "Flipkart (B): The Ongoing Battle for India's E-Commerce Market." Harvard Business School Supplement 518-097, April 2018.  View Details

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