Papers Containing Keywords(s): 'rates productivity'
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Authors
Douglas W Dwyer - 5
Ron Jarmin - 3
Viewing papers 1 through 10 of 15
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Working PaperThe Rise of Industrial AI in America: Microfoundations of the Productivity J-curve(s)
April 2025
Working Paper Number:
CES-25-27
We examine the prevalence and productivity dynamics of artificial intelligence (AI) in American manufacturing. Working with the Census Bureau to collect detailed large-scale data for 2017 and 2021, we focus on AI-related technologies with industrial applications. We find causal evidence of J-curve-shaped returns, where short-term performance losses precede longer-term gains. Consistent with costly adjustment taking place within core production processes, industrial AI use increases work-in-progress inventory, investment in industrial robots, and labor shedding, while harming productivity and profitability in the short run. These losses are unevenly distributed, concentrating among older businesses while being mitigated by growth-oriented business strategies and within-firm spillovers. Dynamics, however, matter: earlier (pre-2017) adopters exhibit stronger growth over time, conditional on survival. Notably, among older establishments, abandonment of structured production-management practices accounts for roughly one-third of these losses, revealing a specific channel through which intangible factors shape AI's impact. Taken together, these results provide novel evidence on the microfoundations of technology J-curves, identifying mechanisms and illuminating how and why they differ across firm types. These findings extend our understanding of modern General Purpose Technologies, explaining why their economic impact'exemplified here by AI'may initially disappoint, particularly in contexts dominated by older, established firms.View Full Paper PDF
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Working PaperProductivity Dispersion, Entry, and Growth in U.S. Manufacturing Industries
August 2021
Working Paper Number:
CES-21-21
Within-industry productivity dispersion is pervasive and exhibits substantial variation across countries, industries, and time. We build on prior research that explores the hypothesis that periods of innovation are initially associated with a surge in business start-ups, followed by increased experimentation that leads to rising dispersion potentially with declining aggregate productivity growth, and then a shakeout process that results in higher productivity growth and declining productivity dispersion. Using novel detailed industry-level data on total factor productivity and labor productivity dispersion from the Dispersion Statistics on Productivity along with novel measures of entry rates from the Business Dynamics Statistics and productivity growth data from the Bureau of Labor Statistics for U.S. manufacturing industries, we find support for this hypothesis, especially for the high-tech industries.View Full Paper PDF
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Working PaperDeclining Dynamism, Allocative Efficiency, and the Productivity Slowdown
January 2017
Working Paper Number:
CES-17-17
A large literature documents declining measures of business dynamism including high-growth young firm activity and job reallocation. A distinct literature describes a slowdown in the pace of aggregate labor productivity growth. We relate these patterns by studying changes in productivity growth from the late 1990s to the mid 2000s using firm-level data. We find that diminished allocative efficiency gains can account for the productivity slowdown in a manner that interacts with the within firm productivity growth distribution. The evidence suggests that the decline in dynamism is reason for concern and sheds light on debates about the causes of slowing productivity growth.View Full Paper PDF
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Working PaperGains from Offshoring? Evidence from U.S. Microdata
April 2013
Working Paper Number:
CES-13-20
We construct a new linked data set with over one thousand offshoring events by matching Trade Adjustment Assistance program petition data to micro-data from the U.S. Census Bureau. We exploit this data to assess how offshoring impacts domestic firm-level aggregate employment, output, wages and productivity. A class of models predicts that more productive firms engage in offshoring, and that this leads to gains in output and (measured) productivity, and potential gains in employment and wages, in the remaining domestic activities of the offshoring firm. Consistent with these models, we find that offshoring firms are on average larger and more productive compared to non-offshorers. However, we find that offshorers suffer from a large decline in employment (32 per cent) and output (28 per cent) relative to their peers even in the long run. Further, we find no significant change in average wages or in total factor productivity measures at affected firms. We find these results robust to a variety of checks. Thus we find no evidence for positive spillovers to the remaining domestic activity of firms in this large sampleof offshoring events.View Full Paper PDF
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Working PaperManagement in America
January 2013
Working Paper Number:
CES-13-01
The Census Bureau recently conducted a survey of management practices in over 30,000 plants across the US, the first large-scale survey of management in America. Analyzing these data reveals several striking results. First, more structured management practices are tightly linked to better performance: establishments adopting more structured practices for performance monitoring, target setting and incentives enjoy greater productivity and profitability, higher rates of innovation and faster employment growth. Second, there is a substantial dispersion of management practices across the establishments. We find that 18% of establishments have adopted at least 75% of these more structured management practices, while 27% of establishments adopted less than 50% of these. Third, more structured management practices are more likely to be found in establishments that export, who are larger (or are part of bigger firms), and have more educated employees. Establishments in the South and Midwest have more structured practices on average than those in the Northeast and West. Finally, we find adoption of structured management practices has increased between 2005 and 2010 for surviving establishments, particularly for those practices involving data collection and analysis.View Full Paper PDF
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Working PaperMarket Structure and Productivity: A Concrete Example
June 2001
Working Paper Number:
CES-01-06
This paper shows that imperfect output substitutability explains part of the observed persistent plant-level productivity dispersion. Specifically, as substitutability in a market increases, the market's productivity distribution exhibits falling dispersion and higher central tendency. The proposed mechanism behind this result is truncation of the distribution from below as increased substitutability shifts demand to lower-cost plants and drives inefficient plants out of business. In a case study of the ready-mixed concrete industry, I examine the impact of one manifestation of this effect, driven by geographic market segmentation resulting from transport costs. A theoretical foundation is presented characterizing how differences in the density of local demand impact the number of producers and the ability of customers to choose between suppliers, and through this, the equilibrium productivity and output levels across regions. I also introduce a new method of obtaining plant-level productivity estimates that is well suited to this application and avoids potential shortfalls of commonly used procedures. I use these estimates to empirically test the presented theory, and the results support the predictions of the model. Local demand density has a significant influence on the shape of plant-level productivity distributions, and accounts for part of the observed intra-industry variation in productivity, both between and within given market areas.View Full Paper PDF
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Working PaperManufacturing Extension And Productivity Dynamics
June 1998
Working Paper Number:
CES-98-08
This paper presents results from an investigation of the effects of manufacturing extension on the productivity dynamics of client plants. Previous econometric studies of manufacturing extension had very little time series information. This limited what researchers could say about the relative timing of extension services and performance improvements. In turn, this makes it difficult to attribute performance improvements to the receipt of extension services. In this paper, I use a panel of client and nonclient plants to more carefully analyze the dynamics of extension and productivity. The results suggest that the timing of observed productivity improvements at client plants is consistent with a positive impact of manufacturing extension. Estimated program impacts are within the range of those found in previous studies.View Full Paper PDF
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Working PaperProductivity Races II: The Issue of Capital Measurement
January 1997
Working Paper Number:
CES-97-03
This paper explores the role of capital measurement in determining the productivity of individual textile plants. In addition to gross book value of capital, we experiment with a perpetual inventory measure of capital and implicit (estimated) deflator associated with the age of the plant. Following the methodology of the earlier paper (Productivity Races I), we find that measures of productivity constructed from different measures of capital are highly correlated. Further, their association with alternative measures of economic performance is approximately the same. Nevertheless, the perpetual inventory measure of capital -- the most desirable measure from a theoretical perspective -- does consistently outperform the other two measures.View Full Paper PDF
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Working PaperProductivity Races I: Are Some Productivuty Measures Better Than Others?
January 1997
Working Paper Number:
CES-97-02
In this study we construct twelve different measures of productivity at the plant level and test which measures of productivity are most closely associated with direct measures of economic performance. We first examine how closely correlated these measures are with various measures of profits. We then evaluate the extent to which each productivity measure is associated with lower rates of plant closure and faster plant growth (growth in employment, output, and capital). All measures of productivity considered are credible in the sense that highly productive plants, regardless of measure, are clearly more profitable, less likely to close, and grow faster. Nevertheless, labor productivity and measures of total factor productivity that are based on regression estimates of production functions are better predictors of plant growth and survival than factor share-based measures of total factor productivity (TFP). Measures of productivity that are based on several years of data appear to outperform measures of productivity that are based solely on data from the most recent year.View Full Paper PDF
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Working PaperWhittling Away At Productivity Dispersion Futher Notes: Persistent Dispersion or Measurement Error?
November 1996
Working Paper Number:
CES-96-11
This note considers several hypotheses regarding measurement error as a source of observed cross-sectional dispersion in plant-level productivity in the US textile industry. The hypotheses that reporting error and/or price rigidity in either materials and/or output account for a substantial portion of the observed dispersion in productivity are consistent with the data. Similarly, the hypothesis that transitory product niches or fashion effects lead to differential markups and consequently dispersion in observed productivity is consistent with the data. The hypothesis that transfer pricing problems lead to persistent differences in plant-level productivity, in contrast, does not appear to be consistent with the data. Finally, the hypothesis that some plants have permanent product niches that lead to dispersion in observed productivity does not appear to be consistent with data. In order to avoid imposing a strong functional form on the data, this note follows a non-parametric methodology developed in the early paper.View Full Paper PDF
