There is a widely held perception that improved supply chain practices and new technologies have led to declines in the inventory-sales ratio. Our empirical analyses of 87 inventory-sales ratios in 45 manufacturing, wholesale distribution, and retail trade industries casts doubt on assumptions of widespread declines in these ratios. We find that less than half of the ratios showed statistically significant declines during the 12 year period from January 1992 through December 2003. Information technology may indeed have improved inventory management, but this improvement is not reflected in inventory-sales ratio data for many U.S. industries. Our detailed case study of the pharmaceutical supply chain also offers additional insights by showing how relevant technological investments led to an extended period in which inventory-to-sales ratios increased.
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IT for Information-Based Partnerships: Empirical Analysis of Environmental Contingencies to Value Co-Creation
December 2009
Working Paper Number:
CES-09-42
We empirically examine IT value co-creation in supply chains, incorporating key contingencies of the competitive environment. Prior research suggests that IT used for strategic informationbased partnerships may benefit supply chains facing higher volatility, enabling tightly coupled integration and enhanced strategic response to changing consumer preferences. Analyzing a unique dataset comprising over 6,000 U.S. manufacturing plants, we obtain three principal results. First, value co-creation using either IT for strategic information-based partnerships (ITIP) or merely IT for transaction efficiency (ITT) is positive and significant. Second, the co-created value from ITIP is larger than that for (ITT), suggesting that information-based partnerships, while perhaps requiring a greater investment, yield a higher return. Third and most importantly, co-created value from using IT for information-based partnerships is positively moderated by demand volatility, i.e., value is greater in higher demand volatility environments. However, we find the opposite is true for using IT for efficient transactions. This is a new contribution to the literature and has important theoretical and practical implications.
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The Diffusion of Modern Manufacturing Practices: Evidence from Retail-Apparel Sectors
February 1997
Working Paper Number:
CES-97-11
As in many industries, firms in the apparel industry exhibit substantial heterogeneity in the adoption of "modern manufacturing" practices. Based on detailed business-unit level data, we show that this heterogeneity can be explained firm inputs. We show that the interaction between these explanatory factors means that complementarities between inputs may emerge over time rather than all at once as is often assumed in other studies of complementarities.
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E-Tailing and its Prospects: Great Expectations Reconsidered
July 2006
Working Paper Number:
CES-06-16
This paper attributes slower than predicted growth in e-commerce retailing to four factors: consumer resistance; the ability of traditional retailers to become multi-channel sellers; prudent official survey and classification practices; and perhaps the limited range of 'pure-play' business models (i.e., retail models that rely mainly on electronic sales). Based on responses to the Census Bureau's Monthly Retail Trade Survey (MRTS) in the five fourth quarter periods from 2001 to 2005, the paper finds that e-commerce has claimed a small but rapidly growing share of U.S. retailing markets; and that pure play companies are still important drivers of this process. However, it also finds that the capacity of pure-play companies to continue in this role may be nearing its limits, and that the rate of continued growth in e-commerce retailing may depend on the business decisions of large, multi-channel sellers. Qualified researchers can access MRTS-based quarterly e-commerce data for 2001-2005 at the Census Bureau's Regional Data Centers.
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Measuring the Impact of COVID-19 on Businesses and People: Lessons from the Census Bureau's Experience
January 2021
Working Paper Number:
CES-21-02
We provide an overview of Census Bureau activities to enhance the consistency, timeliness, and relevance of our data products in response to the COVID-19 pandemic. We highlight new data products designed to provide timely and granular information on the pandemic's impact: the Small Business Pulse Survey, weekly Business Formation Statistics, the Household Pulse Survey, and Community Resilience Estimates. We describe pandemic-related content introduced to existing surveys such as the Annual Business Survey and the Current Population Survey. We discuss adaptations to ensure the continuity and consistency of existing data products such as principal economic indicators and the American Community Survey.
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Do Market Leaders Lead in Business Process Innovation? The Case(s) of E-Business Adoption
April 2011
Working Paper Number:
CES-11-10
This paper investigates the relationship between market position and the adoption of IT-enabled process innovations. Prior research has focused overwhelmingly on product innovation and garnered mixed empirical support. I extend the literature into the understudied area of business process innovation, developing a framework for classifying innovations based on the complexity, interdependence, and customer impact of the underlying business process. I test the framework's predictions in the context of ebuying and e-selling adoption. Leveraging detailed U.S. Census data, I find robust evidence that market leaders were significantly more likely to adopt the incremental innovation of e-buying but commensurately less likely to adopt the more radical practice of e-selling. The findings highlight the strategic significance of adjustment costs and co-invention capabilities in technology adoption, particularly as businesses grow more dependent on new technologies for their operational and competitive performance.
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The Role of Industry Classification in the Estimation of Research and Development Expenditures
November 2014
Working Paper Number:
CES-14-45
This paper uses data from the National Science Foundation's surveys on business research and development (R&D) expenditures that have been linked with data from the Census Bureau's Longitudinal Business Database to produce consistent NAICS-based R&D time-series data based on the main product produced by the firm for 1976 to 2008.The results show that R&D spending has shifted away from domestic manufacturing industries in recent years. This is due in part to a shift in U.S. payrolls away from manufacturing establishments for R&D-performing firms.These findings support the notion of an increasingly fragmented production system for R&D-intensive manufacturing firms, whereby U.S. firms control output and provide intellectual property inputs in the form of R&D, but production takes place outside of the firms' U.S. establishments.
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Concentration Levels in the U.S. Advertising and Marketing Services Industry: Myth vs. Reality
August 2009
Working Paper Number:
CES-09-16
We analyze changes in concentration levels in the U.S. Advertising and Marketing Services industry using data from the U.S. Census Bureau's quinquennial Economic Census and the Service Annual Survey. Heretofore largely ignored, these data allow us to redress some of the measurement problems surrounding estimates found in the existing literature Firm level concentration as measured by the Herfindahl-Hirschman Index varies across the sectors comprising the industry, but all are within the range generally considered as indicative of a competitive industry. At the holding company level, the four largest organizations account for about a quarter of the industry's total revenue, a share lower by an order of magnitude than that frequently cited in the trade press.
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Business Dynamics Statistics of High Tech Industries
January 2016
Working Paper Number:
CES-16-55
Modern market economies are characterized by the reallocation of resources from less productive, less valuable activities to more productive, more valuable ones. Businesses in the High Technology sector play a particularly important role in this reallocation by introducing new products and services that impact the entire economy. Tracking the performance of this sector is therefore of primary importance, especially in light of recent evidence that suggests a slowdown in business dynamism in High Tech industries. The Census Bureau produces the Business Dynamics Statistics (BDS), a suite of data products that track job creation, job destruction, startups, and exits by firm and establishment characteristics including sector, firm age, and firm size. In this paper we describe the methodologies used to produce a new extension to the BDS focused on businesses in High Technology industries.
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Economic Factors Underlying the Unbundling of Advertising Agency Services
August 2009
Working Paper Number:
CES-09-15
This paper addresses a longstanding puzzle involving the unbundling of services that has occurred over more than two decades in the U.S. advertising agency industry: How can the shift from the bundling to the unbundling of services be explained and what accounts for the slow pace of change? Using a cost-based theoretical framework of bundling due to Evans and Salinger (2005, 2008), we develop a simple model of an advertising agency's decision to unbundle its services as a tradeoff between the fixed cost to the advertiser of establishing and maintaining a relationship with an advertising agency and pecuniary economies of scale available in providing media services. The results from an econometric analysis of cross-sectional and pooled data collected by the U.S. Census Bureau for quinquenial censuses conducted between 1982 and 2002 support the key predictions of the model. We find that advertising agency establishments are more likely to unbundle if they are large and diversified in their service offerings and are less likely to do so with increasing age and greater geographical scope. We also find a strong trend toward unbundling over time, a result that is partially explained by increases in media prices over time.
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An 'Algorithmic Links with Probabilities' Crosswalk for USPC and CPC Patent Classifications with an Application Towards Industrial Technology Composition
March 2016
Working Paper Number:
CES-16-15
Patents are a useful proxy for innovation, technological change, and diffusion. However, fully exploiting patent data for economic analyses requires patents be tied to measures of economic activity, which has proven to be difficult. Recently, Lybbert and Zolas (2014) have constructed an International Patent Classification (IPC) to industry classification crosswalk using an 'Algorithmic Links with Probabilities' approach. In this paper, we utilize a similar approach and apply it to new patent classification schemes, the U.S. Patent Classification (USPC) system and Cooperative Patent Classification (CPC) system. The resulting USPC-Industry and CPC-Industry concordances link both U.S. and global patents to multiple vintages of the North American Industrial Classification System (NAICS), International Standard Industrial Classification (ISIC), Harmonized System (HS) and Standard International Trade Classification (SITC). We then use the crosswalk to highlight changes to industrial technology composition over time. We find suggestive evidence of strong persistence in the association between technologies and industries over time.
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