We examine how product life cycle affects investment and financing by estimating an industry equilibrium model that embeds product portfolio characteristics. In the model, firms trade off higher profitability of newer products versus product introduction costs. Using product-level data, we find that the product dimension is critical in quantitatively explaining cash flow dynamics, corporate policies, and industry structure. We show that product introductions and capital investment are complements and that product dynamics incentivize preserving more debt capacity. Our estimates reveal that product life cycle is more pronounced for firms with smaller and more concentrated product portfolios as well as those with high product variety.

我们通过估计嵌入产品组合特征的行业均衡模型来研究产品生命周期如何影响投资和融资。在该模型中，企业在新产品的更高盈利能力与产品引进成本之间进行权衡。使用产品级数据，我们发现产品维度对于定量解释现金流动态、公司政策和行业结构至关重要。我们表明，产品推出和资本投资是互补的，产品动态会激励保留更多的债务能力。我们的估计表明，产品生命周期对于产品组合更小、更集中的公司以及产品种类繁多的公司来说更为明显。