Primary Versus Secondary Production Techniques in U.S. Manufacturing

In this paper we discuss and analyze a classical economic puzzle: whether differences in factor intensities reflect patterns of specialization or the co-existence of alternative techniques to produce output. We use observations on a large cross-section of U.S. manufacturing plants from the Census of Manufactures, including those that make goods primary to other industries, to study differences in production techniques. We find that in most cases material requirements do not depend on whether goods are made as primary products or as secondary products, which suggests that differences in factor intensities usually reflect patterns of specialization. A few cases where secondary production techniques do differ notably are discussed in more detail. However, overall the regression results support the neoclassical assumption that a single, best-practice technique is chosen for making each product.CES,economic,research,micro,data,microdata,chief,economist

A Generalized Expression for the Commodity and the Industry Technology Models in Input-Output Analysis

Technical coefficients are usually constructed from commodity or industry technology models. Although these models are considered as competing, there is an encompassing framework that admits a clear comparison.Technical coefficients, commodity technology, industry technology, input-output analysis,

The Theory of Benchmarking and the Measurement of Industrial Organization

If more productive firms grow relatively fast, an industry performs better, even when no firm exhibits technical or efficiency change.In other words, the two well-known sources of productivity growth-technology and efficiency-can be augmented by a third one, namely the industrial organization effect.In this paper the efficiency of an industrial organization and its contribution to performance are measured by benchmarking all firms on the industry.More precisely, efficiency is measured by the proximity between a firm and the best practices.Aggregation of firm efficiencies is imperfect.The bias is used to measure the efficiency of the industrial organization.In benchmarking, change transmitted by a firm represents productivity growth and change transmitted by the best practices represents technical change.Although I use a nonparametric framework, which requires only input and output information, duality analysis reveals the Solow residual.In discrete time Malmquist indices capture the measurement of the industrial organization effect, efficiency changes, and technical change.The industrial organization of Japanese banking is analyzed.

Firm efficiency, industry performance and the economy: three-way decomposition with an application to Andalusia

An economy may perform better because the firms become more efficient, the industries are better organized, or the allocation between industries is improved. In this paper we extend the literature on the measurement of industry efficiency (a decomposition in firm contributions and an organizational effect) to a third level, namely that of the economy. The huge task of interrelating the performance of an economy to industrial firm data is accomplished for Andalusia

Alternative Measures of Total Factor Productivity Growth

The four main approaches to the measurement of total factor productivity (TFP)-growth and its decomposition are (i) Solow's residual analysis, (ii) the Index Number Approach, (iii) Input-Output Analysis (IO), and (iv) Data Envelopment Analysis (DEA).The corresponding measures of TFP growth are based on different assumptions, which we expose and interrelate.The Solow Residual serves as the benchmark for our comparisons.The interrelationships between the alternative measures permit an interpretation of the differences among them.We consolidate the four alternative measures in a common framework.

The Location of Comparative Advantages on the Basis of Fundamentals Only

We propose a new way to locate the comparative advantages of two economies linked by international trade. We construct a competitive benchmark based only on the fundamentals of the two economies: endowments, preferences and technologies. The direction of trade is endogenously determined by a linear program with an input-output core. The factor contents of that trade are compared with factor endowments to test the Heckscher-Ohlin model in the presence of different technologies and preferences. We can also evaluate the gains of free bilateral trade. The model is applied to a customs union between Europe and Canada. The Heckscher-Ohlin factor abundance specialization hypothesis is supported by the data.Comparative Advantage, Gains Free Trade,