Product market strategy and corporate policies

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