Creator: Eaton, Jonathan, Kortum, Samuel, and Kramarz, Francis Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 332 Abstract:
We examine entry across 113 national markets in 16 different industries using a comprehensive data set of French manufacturing firms. The data are unique in indicating how much each firm exports to each destination. Looking across all manufacturers: (1) Firms differ substantially in export participation, with most selling only at home; (2) The number of firms selling to multiple markets falls off with the number of destinations with an elasticity of –2.5; (3) Decomposing French exports to each destination into the size of the market and French share, variation in market share translates nearly completely into firm entry while about 60 percent of the variation in market size is reflected in firm entry. Looking within each of 16 industries we find little variation in these patterns. We propose that any successful model of trade and market structure must confront these facts.
Keyword: Metals industries, Market share, Furniture industry, Industrial machinery, International trade, ndustrial market , Tobacco industry, Exports, Heavy industry, and Industrial chemistry Subject (JEL): L11 - Production, Pricing, and Market Structure; Size Distribution of Firms, F14 - Empirical Studies of Trade, and L60 - Industry Studies: Manufacturing: General
Creator: Geweke, John Series: New methods in business cycle research Abstract:
A simple stochastic model of the firm is constructed in which a dynamic monopolist who maximizes a discounted profits stream subject to labor adjustment costs and given factor prices sets output price as a distributed lag of past wages and input prices. If the observed relation of wages and prices in manufacturing arises solely from this behavior then wages and input prices are exogenous with respect to output prices. In tests using quarterly and monthly series for the straight time wage, an index of raw materials prices and the wholesale price index for manufacturing and its durable and nondurable subsectors this hypothesis cannot be refuted for the period 1955:1 to 1971:11. During the period 1926:1 to 1940:11, however, symmetrically opposite behavior is observed manufacturing wholesale prices are exogenous with respect to the wage rate, a relation which can arise if dynamically monopsonistic firms compete in product markets. Neither structural relation has withstood direct wage and price controls.
Keyword: Wholesale, Labor, Wages, Prices, and Manufacturing Subject (JEL): E32 - Business Fluctuations; Cycles, E31 - Price Level; Inflation; Deflation, and L60 - Industry Studies: Manufacturing: General
Creator: Bridgman, Benjamin, Qi, Shi, and Schmitz, James Andrew Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 519 Abstract:
The idea that cartels might reduce industry productivity by misallocating production from high to low productivity producers is as old as Adam. However, the study of the economic consequences of cartels has almost exclusively focused on the losses from higher prices (i.e., Harberger triangles). Yet, as the old idea suggests, we show that the rules for quotas and side payments in the New Deal sugar cartel led to significant misallocation of production. The resulting productivity declines essentially destroyed the entire cartel profit. The magnitude of the deadweight losses (relative to value added) was large: we estimate a lower bound for the losses equal to 25 percent and 42 percent in the beet and cane industries, respectively.
Keyword: Cartels, Quota, and Monopoly Subject (JEL): L00 - Industrial Organization: General, L60 - Industry Studies: Manufacturing: General, and L43 - Legal Monopolies and Regulation or Deregulation
Creator: Holmes, Thomas J. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 205 Abstract:
This paper provides new evidence that state policies play a role in the location of industry. The paper classifies a state as pro-business or anti-business depending upon whether or not the state has a right-to-work law. The paper finds that, on average, there is a large abrupt increase in manufacturing activity when crossing a state border from an anti-business state into a pro-business state.
Subject (JEL): L52 - Industrial Policy; Sectoral Planning Methods, R38 - Production Analysis and Firm Location: Government Policy, and L60 - Industry Studies: Manufacturing: General
Creator: Huggett, Mark and Ospina, Sandra Series: Productivity and the industrial revolution Abstract:
A number of theoretical models of technology adoption have been proposed that emphasize technological switching, loss of expertise and subsequent technology-specific learning. These models imply that measured productivity may initially fall and then later rise after the adoption of a new technology. This paper investigates whether or not this implication is a feature of plant-level data from the Colombian manufacturing sector. We regress measures of productivity growth at the plant level on a plant-specific measure of technology adoption and its lagged values. We find that...
Keyword: Embodied, Productivity, Latin America, Manufacturing, South America, Technology, and Colombia Subject (JEL): D24 - Production and organizations - Production ; Cost ; Capital and total factor productivity ; Capacity, L60 - Industry Studies: Manufacturing: General, O14 - Economic development - Industrialization ; Manufacturing and service industries ; Choice of technology, and O33 - Technological change ; Research and development - Technological change : Choices and consequences ; Diffusion processes
Creator: Mitchell, Matt Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 269 Abstract:
Many manufacturing industries, including the computer industry, have seen large increases in productivity growth rates and have experienced a reduction in average establishment size and a decrease in the variance of the sizes of plants. A vintage capital model is introduced where learning increases productivity on any given technology and firms choose when to adopt a new vintage. In the model, a rise in the rate of technological change leads to a decrease in both the mean and variance of the size distribution.
Keyword: Plant Size, Technological Change, and Productivity Growth Subject (JEL): L60 - Industry Studies: Manufacturing: General, L11 - Production, Pricing, and Market Structure; Size Distribution of Firms, and O30 - Innovation; Research and Development; Technological Change; Intellectual Property Rights: General