Economists (Ollinger and Mueller, 2003; Golan et al., 2004) have considered some of the economic forces, such as demands from major customers, that encourage plants to maintain food safety process control. Other economists, such as Roberts (2005), have identified food safety technologies that enable better control harmful pathogens. However, economists have not put the two together. The purpose of this paper is to examine the impact of economic forces, including firm effects and plant technology, customer demands, and regulation, on food safety technology use. Preliminary results suggest that customer demand has the greatest impact.
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The Direct and Indirect Costs of Food Safety Regulation
September 2008
Working Paper Number:
CES-08-31
The cost of compliance with the Pathogen Reduction Hazard Analysis Critical Control Program (PR/HACCP) rule of 1996 has been controversial since it was first proposed. Surveys have provided some cost information but examined plant size and other indirect effects with limited data and did not make cost estimates of direct cost components, such as mandated tasks. This paper addresses those deficiencies with data from a national survey of meat and poultry plants on PR/HACCP costs. Results indicate that (1) mandated tasks are the most costly component of the PR/HACCP rule, (2) regulation favors large plants over small ones, and (3) private actions are nearly as costly as direct regulation.
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Technological Change and Economies of Scale in U.S. Poultry Slaughter
April 2000
Working Paper Number:
CES-00-05
This paper uses a unique data set provided by the Census Bureau to empirically examine technological change and economies of scale in the chicken and turkey slaughter industries. Results reveal substantial scale economies that show no evidence of diminishing with plant size and that are much greater than those realized in cattle and hog slaughter. Additionally, it is shown that controlling for plant product mix is critical to cost estimation and animal inputs are much more elastic to prices than in either cattle or hogs. Results suggest that consolidation is likely to continue, particularly if demand growth diminishes.
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The Effects of Productvity and Demand-Specific Factors on Plant Survival and Ownership Change in the U.S. Poultry Industry
July 2015
Working Paper Number:
CES-15-20
In this paper we study the productivity-survival link in the U.S. poultry processing industry using the longitudinal data constructed from five Censuses of Manufactures between 1987 and 2007. First, we study the effects of physical productivity and demand-specific factors on plant survival and ownership change. Second, we analyze the determinants of the firm-level expansion. The results show that higher demand-specific factors decrease the probability of exit and increase the probability of ownership change. The effect of physical productivity on the probability of exit or ownership change is generally insignificant. Also, firms with higher demand-specific factors have higher probability to expand whereas the average firm-level physical productivity turns out to be an insignificant determinant of firm expansion.
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How Businesses Use Information Technology: Insights for Measuring Technology and Productivity
June 2006
Working Paper Number:
CES-06-15
Business use of computers in the United States dates back fifty years. Simply investing in information technology is unlikely to offer a competitive advantage today. Differences in how businesses use that technology should drive differences in economic performance. Our previous research found that one business use ' computers linked into networks ' is associated with significantly higher labor productivity. In this paper, we extend our analysis with new information about the ways that businesses use their networks. Those data show that businesses conduct a variety of general processes over computer networks, such as order taking, inventory monitoring, and logistics tracking, with considerable heterogeneity among businesses. We find corresponding empirical diversity in the relationship between these on-line processes and productivity, supporting the heterogeneity hypothesis. On-line supply chain activities such as order tracking and logistics have positive and statistically significant productivity impacts, but not processes associated with production, sales, or human resources. The productivity impacts differ by plant age, with higher impacts in new plants. This new information about the ways businesses use information technology yields vital raw material for understanding how using information technology improves economic performance.
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Do EPA Regulations Affect Labor Demand? Evidence From the Pulp and Paper Industry
August 2013
Working Paper Number:
CES-13-39
The popular belief is that environmental regulation must reduce employment, since suchregulations are expected to increase production costs, which would raise prices and thus reducedemand for output, at least in a competitive market. Although this effect might seem obvious, a careful microeconomic analysis shows that it is not guaranteed. Even if environmental regulation reduces output in the regulated industry, abating pollution could require additional labor (e.g. to monitor the abatement capital and meet EPA reporting requirements). It is also possible for pollution abatement technologies to be labor enhancing. In this paper we analyze how a particular EPA regulation, the so-called 'Cluster Rule' (CR) imposed on the pulp and paper industry in 2001, affected employment in that sector. Using establishment level data from the Census of Manufacturers and Annual Survey of Manufacturers at the U.S. Census Bureau from 1992-2007 we find evidence of small employment declines (on the order of 3%-7%), which are sometimes statistically significant, at a subset of the plants covered by the CR.
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Mergers and Acquisitions, Employment, Wages and Plant Closures in the U.S. Meat Product Industries: Evidence from Micro Data
March 2007
Working Paper Number:
CES-07-08
The purpose of this paper is to evaluate the impact of mergers and acquisitions (M&As) on wages and employment and plant closures in the meat packing, prepared meat products, and poultry slaughter and processing industries over 1977-87 and 1982-92. The analysis relies on a balanced panel dataset of all plants owned by meat and poultry firms that existed over 1977-87 or 1982-92. We find that (1) M&As are positively associated with wages in the meat packing and prepared meat products industries over 1977-87, but not over 1982-92; (2) changes in employment are positively related to M&As in all three meat and poultry industries over 1977-87, but only in the poultry industry over 1982-92; and (3) M&As are negatively associated with plant closures.
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Predictive Analytics and Organizational Architecture:
Plant-Level Evidence from Census Data
January 2019
Working Paper Number:
CES-19-02
We examine trends in the use of predictive analytics for a sample of more than 25,000 manufacturing plants using proprietary data from the US Census Bureau. Comparing 2010 and 2015, we find that use of predictive analytics has increased markedly, with the greatest use in younger plants, professionally-managed firms, more educated workforces, and stable industries. Decisions on data to be gathered originate from headquarters and are associated with less delegation of decision-making and more widespread awareness of quantitative targets among plant employees. Performance targets become more accurate, long-term oriented, and linked to company-wide performance, and management incentives strengthen, both in terms of monetary bonuses and career outcomes. Plants increasing predictive analytics become more efficient, with lower inventory, increased volume of shipments, narrower product mix, reduced management payroll and increased use of flexible and temporary employees. Results are robust to a specification based on increased government demand for data.
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Regulation and Firm Size, Foreign-Based Company Market Presence, Merger Choice In The U.S. Pesticide Industry
June 1994
Working Paper Number:
CES-94-06
This paper uses Two-Stage Least Squares to examine the impact of pesticide product regulation on the number of firms and the foreign-based company market share of U.S. Pesticide Companies. It also investigates merger choice with a multinomial logit model. The principal finding is that greater research and regulatory costs affected small innovative pesticide companies more than large ones and encouraged foreign company expansion in the U.S. pesticide market. It was also found that the stage of the industry growth cycle and farm sector demand influenced the number of innovative companies and foreign-based company market share. Finally, firms that remain in the industry were found to have greater price cost margins, lower regulatory penalties costs, and a much greater multinational business presence than those that departed.
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Scale Economies and Consolidation in Hog Slaughter
March 2000
Working Paper Number:
CES-00-03
We use establishment based panel data to estimate a cost function which identifies the role of scale economies in hog slaughter consolidation. We find modest by extensive technological scale economies in the 1990s, and they became more important over time. But wages rose sharply with plant size through the 1970s and those wage premiums generated a pecuniary scale diseconomy that largely offset the effects of technological scale economies. The size-wage relation disappeared in the 1980; with growing technological scale economies and disappearing pecuniary diseconomies, large plants realized growing cost advantages over smaller plants, and production shifted to larger plants.
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Computer Network Use and Firms' Productivity Performance: The United States vs. Japan
September 2008
Working Paper Number:
CES-08-30
This paper examines the relationship between computer network use and firms' productivity performance, using micro-data of the United States and Japan. To our knowledge, this is the first comparative analysis using firm-level data for the manufacturing sector of both countries. We find that the links between IT and productivity differ between U.S. and Japanese manufacturing. Computer networks have positive and significant links with labor productivity in both countries. However, that link is roughly twice as large in the U.S. as in Japan. Differences in how businesses use computers have clear links with productivity for U.S. manufacturing, but not in Japan. For the United States, the coefficients of the intensity of network use are positive and increase with the number of processes. Coefficients of specific uses of those networks are positive and significant. None of these coefficients are significant for Japan. Our findings are robust to alternative econometric specifications. They also are robust to expanding our sample from single-unit manufacturing firms, which are comparable in the two data sets, to the entire manufacturing sector in each country, as well as to the wholesale and retail sector of Japan.
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