Papers Containing Tag(s): 'Annual Survey of Manufactures'
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Viewing papers 131 through 140 of 246
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Working PaperConcentration, Diversity, and Manufacturing Performance
July 2010
Working Paper Number:
CES-10-14
Regional economist Benjamin Chinitz was one of the most successful proponents of the idea that regional industrial structure is an important determinant of economic performance. His influential article in the American Economic Review in 1961 prompted substantial research measuring industrial structure at the regional scale and examining its relationships to economic outcomes. A considerable portion of this work operationalized the concept of regional industrial structure as sectoral diversity, the degree to which the composition of an economy is spread across heterogeneous activities. Diversity is a relatively simple construct to measure and interpret, but does not capture the implications of Chinitz's ideas fully. The structure within regional industries may also influence the performance of business enterprises. In particular, regional intra-industry concentration'the extent to which an industry is dominated by a few relatively large firms in a locality'has not appeared in empirical work studying economic performance apart from individual case studies, principally because accurately measuring concentration within a regional industry requires firm-level information. Multiple establishments of varying sizes in a given locality may be part of the same firm. Therefore, secondary data sources on establishment size distributions (such as County Business Patterns or aggregated information from the Census of Manufactures) can yield only deceptive portrayals of the level of regional industrial concentration. This paper uses the Longitudinal Research Database, a confidential establishment-level dataset compiled by the United States Census Bureau, to compare the influences of industrial diversity and intra-industry concentration upon regional and firm-level economic outcomes. Manufacturing establishments are aggregated into firms and several indicators of regional industrial concentration are calculated at multiple levels of industrial aggregation. These concentration indicators, along with a regional sectoral diversity measure, are related to employment change over time and incorporated into plant productivity estimations, in order to examine and distinguish the relationships between the differing aspects of regional industrial structure and economic performance. A better understanding of the particular links between regional industrial structure and economic performance can be used to improve economic development planning efforts. With continuing economic restructuring and associated workforce dislocation in the United States and worldwide, industrial concentration and over-specialization are separate mechanisms by which regions may 'lock in' to particular competencies and limit the capacity to adjust quickly and efficiently to changing markets and technologies. The most appropriate and effective policies for improving economic adaptability should reflect the structural characteristics that limit flexibility. This paper gauges the consequences of distinct facets of regional industrial structure, adding new depth to the study of regional industries by economic development planners and researchers.View Full Paper PDF
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Working PaperElectronic Networking Technologies, Innovation Misfit, and Plant Performance
February 2010
Working Paper Number:
CES-10-03
Prior work on information technology (IT) adoption and economic impacts typically employs an instrumental logic in which firms lead with innovation when they possess characteristics that make it economically beneficial to do so and lag when they do not. However, firms may deviate from this idealized picture when they possess characteristics of an innovation laggard but exhibit the behavior of an innovation leader (or vice versa), with implications for the returns to IT investment. This study develops a conceptual framework and hypotheses regarding the implications of such deviations, which we call innovation misfits. Using a data set comprising measures of the adoption of electronic networking technologies (ENT) in over 25,000 U.S. manufacturing plants, productivity regression estimation reveals a consistent pattern that the association between IT and productivity is diminished in the presence of innovation misfit. We discuss the implications of innovation misfit for scholarship and management practice, which are numerous.View Full Paper PDF
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Working PaperEuler-Equation Estimation for Discrete Choice Models: A Capital Accumulation Application
January 2010
Working Paper Number:
CES-10-02
This paper studies capital adjustment at the establishment level. Our goal is to characterize capital adjustment costs, which are important for understanding both the dynamics of aggregate investment and the impact of various policies on capital accumulation. Our estimation strategy searches for parameters that minimize ex post errors in an Euler equation. This strategy is quite common in models for which adjustment occurs in each period. Here, we extend that logic to the estimation of parameters of dynamic optimization problems in which non-convexities lead to extended periods of investment inactivity. In doing so, we create a method to take into account censored observations stemming from intermittent investment. This methodology allows us to take the structural model directly to the data, avoiding time-consuming simulation based methods. To study the effectiveness of this methodology, we first undertake several Monte Carlo exercises using data generated by the structural model. We then estimate capital adjustment costs for U.S. manufacturing establishments in two sectors.View Full Paper PDF
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Working PaperThe Impact of Plant-Level Resource Reallocations and Technical Progress on U.S. Macroeconomic Growth
December 2009
Working Paper Number:
CES-09-43
We build up from the plant level an "aggregate(d) Solow residual" by estimating every U.S. manufacturing plant's contribution to the change in aggregate final demand between 1976 and 1996. We decompose these contributions into plant-level resource reallocations and plant-level technical efficiency changes. We allow for 459 different production technologies, one for each 4- digit SIC code. Our framework uses the Petrin and Levinsohn (2008) definition of aggregate productivity growth, which aggregates plant-level changes to changes in aggregate final demand in the presence of imperfect competition and other distortions and frictions. On average, we find that aggregate reallocation made a larger contribution than aggregate technical efficiency growth. Our estimates of the contribution of reallocation range from 1:7% to2:1% per year, while our estimates of the average contribution of aggregate technical efficiency growth range from 0:2% to 0:6% per year. In terms of cyclicality, the aggregate technical efficiency component has a standard deviation that is roughly 50% to 100% larger than that of aggregate total reallocation, pointing to an important role for technical efficiency in macroeconomic fluctuations. Aggregate reallocation is negative in only 3 of the 20 years of our sample, suggesting that the movement of inputs to more highly valued activities on average plays a stabilizing role in manufacturing growth.View Full Paper PDF
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Working PaperIT 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.View Full Paper PDF
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Working PaperDiscretionary Disclosure in Financial Reporting: An Examination Comparing Internal Firm Data to Externally Reported Segment Data
September 2009
Working Paper Number:
CES-09-28
We use confidential, U.S. Census Bureau, plant-level data to investigate aggregation in external reporting. We compare firms' plant-level data to their published segment reports, conducting our tests by grouping a firm's plants that share the same four-digit SIC code into a 'pseudo-segment.' We then determine whether that pseudo-segment is disclosed as an external segment, or whether it is subsumed into a different business unit for external reporting purposes. We find pseudo-segments are more likely to be aggregated within a line-of-business segment when the agency and proprietary costs of separately reporting the pseudo-segment are higher and when firm and pseudo-segment characteristics allow for more discretion in the application of segment reporting rules. For firms reporting multiple external segments, aggregation of pseudo-segments is driven by both agency and proprietary costs. However, for firms reporting a single external segment, we find no evidence of an agency cost motive for aggregation.View Full Paper PDF
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Working PaperOn Spatial Heterogeneity in Environmental Compliance Costs
September 2009
Working Paper Number:
CES-09-25R
This paper examines the extent of variation in regulatory stringency below the state level, using establishment-level data from the U.S. Census Bureau's Pollution Abatement Costs and Expenditures (PACE) survey to estimate a county-level index of environmental compliance costs (ECC). County-level variation is found to explain 11-18 times more of the variation in ECC than state-level variation alone, and the range of ECC within a state is often large. At least 34% of U.S. counties have ECC that are statistically different from their states'. Results suggest that important spatial variation is lost in state-level studies of environmental regulation.View Full Paper PDF
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Working PaperThe Micro-Dynamics of Skill Mix Changes in a Dual Labor Market: The Spanish Manufacturing Experience
May 2009
Working Paper Number:
CES-09-12
As in many other developed countries, the share of skilled workers in Spain's labor force dramatically increased during the 1990s. This paper decomposes the aggregate skill mix change by a set of key firm characteristics and in the context of Spain's dual labor market. We find that continuing firms were the major drivers of skill mix growth and that expanding firms in particular increased their ratio of skilled workers. Net entry played a smaller but positive role due to higher-skilled entrants and lower-skilled exiters. Finally, we find that although firms with higher concentrations of temporary workers make bigger employment changes overall, firms' low-skilled employment is more strongly pro-cyclical than is high skilled employment.View Full Paper PDF
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Working PaperTrends in Regional Industrial Concentration in the United States
April 2009
Working Paper Number:
CES-09-06
In a seminal article, Benjamin Chinitz (1961) raises the question of the effects that industry size, structure, and economic diversification may have on firm performance and regional economies. His line of inquiry suggests a related but conceptually distinct issue: how does the extent to which a industry is regionally dominated'concentrated locally in a single or small number of firms'impact the local performance of that industry? This question has received little attention, principally because accurately measuring industrial concentration at the regional scale requires firm-level information. This paper makes use of confidential plant- and firm-level manufacturing data to explore patterns of industrial concentration in the United States at the regional scale. Regional analogues of concentration ratios and other measures commonly used in the aspatial industrial organization literature indicate the extent to which manufacturing activity is concentrated in a small number of firms. Both the manufacturing sector as a whole and major manufacturing industry sectors are examined in order to determine the extent of industrial concentration in the continental United States, to explore changes over time in geographic patterns of concentration, and to investigate associations between industrial concentration and employment growth at the regional scale. Implications for understanding regional growth and for devising regional economic development policy are discussed.View Full Paper PDF
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Working PaperMisallocation and Manufacturing TFP in China and India
February 2009
Working Paper Number:
CES-09-04
Resource misallocation can lower aggregate total factor productivity (TFP). We use micro data on manufacturing establishments to quantify the potential extent of misallocation in China and India compared to the U.S. Compared to the U.S., we measure sizable gaps in marginal products of labor and capital across plants within narrowly-defined industries in China and India. When capital and labor are hypothetically reallocated to equalize marginal products to the extent observed in the U.S., we calculate manufacturing TFP gains of 30-50% in China and 40-60% in India.View Full Paper PDF
