Plant Turnover and Demand Fluctuations in the Ready-Mix Concrete Industry
March 2006
Working Paper Number:
CES-06-08
Abstract
Fluctuations in demand cause some plants to exit a market and other to enter. Would eliminating these 'uctuations reduce plant turnover? A structural model of entry and exit in concentrated markets is estimated for the ready-mix concrete industry, using plant level data from the U.S. Census. The Nested Pseudo-Likelihood algorithm is used to 'nd parameters which rationalize behavior of 'rms involved in repeated competition. Due to high sunk costs, turnover rates would only be reduced by 3% by eliminating demand 'uctuations at the county level, saving around 20 million dollars a year in scrapped capital. However, demand 'uctuations blunt 'rms'incentive to invest, reducing the number of large plants by more than 50%.
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By analyzing the content of working papers, KeyBERT identifies terms and phrases that capture the essence of the
text, highlighting the most significant topics and trends. This approach not only enhances searchability but
provides connections that go beyond potentially domain-specific author-defined keywords.
:
demand,
investment,
market,
production,
econometric,
macroeconomic,
estimating,
manufacturing,
industrial,
sale,
cost,
merger,
produce,
turnover,
oligopolistic,
yield,
plants industry,
budget
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including "organizations." By filtering for frequent words and phrases labeled as "organizations", papers are
identified to contain references to specific institutions, datasets, and other organizations.
:
Annual Survey of Manufactures,
Internal Revenue Service,
National Science Foundation,
Center for Economic Studies,
Permanent Plant Number,
Insurance Information Institute,
Longitudinal Business Database,
Chicago Census Research Data Center,
Department of Justice,
Census of Manufacturing Firms,
North American Industry Classification System,
United States Census Bureau
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