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The effect of competition on product removal

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  • Xabier Barriola

    (Aalto University School of Science)

Abstract

The relationship between innovation and competition has been vastly studied over the past fifty years. However, one piece of the puzzle that has not been studied in detail is how in certain industries competition has an effect in the number of products that are removed from the market. That is why in this paper, I use scanner data to analyze the effect of competition on product removal. In particular, I track sales in the beer industry across a set of 1107 over a period of four years. Following previous studies, I use the merger between SABMiller and Molson Coors as an unexpected change in the industry to estimate future market concentration. I find that there is a negative relationship between removal and concentration. Therefore, retailers decide to remove products from their shelves in a faster way when the market is more competitive to open the gates for a more dynamic assortment.

Suggested Citation

  • Xabier Barriola, 2022. "The effect of competition on product removal," Marketing Letters, Springer, vol. 33(2), pages 203-214, June.
    • Handle: RePEc:kap:mktlet:v:33:y:2022:i:2:d:10.1007_s11002-021-09598-0
    DOI: 10.1007/s11002-021-09598-0
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