The impact of product diversity and distribution networks on consumption expansion
通过构建消费效用函数和面板数据分析，发现扩大分销网点会降低均衡价格，而增加产品多样性会促使消费者更多搜索，两者均能提升居民总消费和消费水平。
Investigation on the influencing factors of consumption expansion is an important subject in business research. This study constructs a consumption utility function and analyzes the relationship between search cost and product heterogeneity and equilibrium price. Employing the data on 31 regions in China from 2002 to 2020, the panel data model is used to verify the results of the theoretical analysis. We draw the following conclusions. (1) Expanding the number of distribution outlets will lead to a decline in the equilibrium price, and an increase in product diversity prompts consumers to conduct more searches. (2) Expanding distribution networks can increase residents’ total consumption and consumption level. (3) An increase in product diversity can expand resident consumption. The conclusions suggest that distributors and retailers can increase the categories of their products, provide consumers with diversified decision-making space, and stimulate consumption expansion.