CES-WP-94-14
Pollution Abatement Costs, Regulation And Plant-Level Productivity
Wayne Gray, Ronald Shadbegian
December 01, 1994
We analyze the connection between productivity, pollution abatement expenditures, and other measures of environmental regulation for plants in three industries (paper, oil, and steel). We examine data from 1979 to 1990, considering both total factor productivity levels and growth rates. Plants with higher abatement cost levels have significantly lower productivity levels. The magnitude of the impact is somewhat larger than expected: $1 greater abatement costs appears to be associated with the equivalent of $1.74 in lower productivity for paper mills, $1.35 for oil refineries, and $3.28 for steel mills. However, these results apply only to variation across plants in productivity levels. Estimates looking at productivity variation within plants over time, or estimates using productivity growth rates show a smaller (and insignificant) relationship between abatement costs and productivity. Other measures of environmental regulation faced by the plants (compliance status, enforcement activity, and emissions) are not significantly related to productivity.
 View Paper 33 Pages 57750 Bytes
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CES-WP-94-13
EXPORTERS, SKILL UPGRADING AND THE WAGE GAP*
Bradford Jensen, Andrew Bernard
November 01, 1994
This paper examines plant level evidence on the increase in demand for non-production workers in U.S. manufacturing during the 1980's. The major finding is that increases in employment at exporting plants contribute heavily to the observed increase in relative demand for skilled labor in manufacturing during the period. Exporters account for almost all of the increase in the wage gap between high and low-skilled workers. Tests of the competing theories with plant level data show that demand changes associated with increased exports are strongly associated with the wage gap increases. Increases in plant technology are determinants of within plant skill-upgrading but not of the aggregate wage gap rise.
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CES-WP-94-12
Primary Versus Secondary Production Techniques in U.S. Manufacturing
Joe Mattey, Thijs Raa
October 01, 1994
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.
View Paper 27 Pages 88064 Bytes
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CES-WP-94-9
A Guide To R&D Data At The Center For Economic Studies U.S. Bureau Of THe Census
James Adams, Suzanne Peck
August 01, 1994
The National Science Foundation R&D Survey is an annual survey of firms' research and development expenditures. The survey covers 3000 firms reporting positive R&D. This paper provides a description of the R&D data available at the Center for Economic Studies (CES). The most basic data series available contains the original survey R&D data. It covers the years 1972-92. The remaining two series, although derived from the original files, specialize in particular items. The Mandatory Series contains required survey items for the years 1973-88. Items reported at firms' discretion are in the Voluntary Series, which covers the years 1974-89. Both of the derived series incorporate flags that track quality of the data. Both also include corrections to the data based on original hard copy survey evidence stored at CES. In addition to describing each dataset, we offer suggestions to researchers wishing to use the R&D data in exploring various economic issues. We report selected response rates, discuss the survey design, and provide hints on how to use the data.
View Paper 65 Pages 116736 Bytes
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CES-WP-94-8
Cross Sectional Variation In Toxic Waste Releases From The U.S. Chemical Industry
Mary Streitwieser
August 01, 1994
This paper measures and examines the 1987 cross sectional variation in toxic releases from the U.S. chemical industry. The analysis is based on a unique plant level data set of over 2,100 plants, combining EPA toxic release data with Census Bureau data on economic activity. The main results are that intra-industry variation in toxic releases are as great as, or greater, than inter-industry variation, and that plant, firm, and regulatory characteristics are important factors in explaining observed variation in toxic releases. Even after controlling for primary product and plant characteristics, there are some firms that generate significantly lower toxic waste due to managerial ability and/or technology differences.
View Paper 48 Pages 147456 Bytes
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CES-WP-94-11
Capital Adjustment Patterns in Manufacturing Plants
Mark Doms, Timothy Dunne
August 01, 1994
A common result from altering several fundamental assumptions of the neoclassical investment model with convex adjustment costs is that investment may occur in lumpy episodes. This paper takes a step back and asks "How lumpy is the investment?" We answer this question by documenting the distributions of investment and capital adjustment for a sample of over 33,000 manufacturing plants drawn from over 400 four-digit industries. We find that many plants do undergo large investment episodes, however, there is tremendous variation across plants in their capital accumulation patterns. This paper explores how the variation in capital accumulation patterns vary by observable plant and firm characteristics, and how large investment episodes at the plant level transmit into fluctuations in aggregate investment.
View Paper 42 Pages 884469 Bytes
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CES-WP-94-10
Evidence on the Employer Size-Wage Premium From Worker-Establishment Matched Data
Kenneth Troske
August 01, 1994
In spite of the large and growing importance of the employer size-wage premium, previous attempts to account for this phenomenon using observable worker or employer characteristics have met with limited success. The primary reason for this lack of success has been the lack of suitable data. While most theoretical explanations for the size-wage premium are based on the matching of employer and employee characteristics, previous empirical work has relied on either worker surveys with little information about a worker's employer, or establishment surveys with little information about workers. In contrast, this study uses the newly created Worker-Establishment Characteristic Database, which contains linked employer-employee data for a large sample of manufacturing workers and establishments, to examine the employer size-wage premium. The main results are: 1) Examining the cross-plant distribution of the skill of workers shows that managers with larger observable measures of skill work in large plants and firms with production workers with larger observable measures of skill. 2) Results from reduced form wage regressions show that including measures of the amount or type of capital in a worker's plant eliminates the establishment size-wage premium. 3) These results are robust to efforts at correcting for possible bias in the parameter estimates due to sample selection. While these findings are consistent with neoclassical explanations for the size-wage premium that hypothesize that large employers employ more skilled workers, their primary importance is that they show that the employer size-wage premium can be accounted for with employer-employee matched data. As such, these data lend support to models which emphasize the role of employer-employee matching in accounting for both cross-sectional and dynamic aspects of the wage distribution.
View Paper 27 Pages 132096 Bytes
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CES-WP-94-6
Regulation and Firm Size, Foreign-Based Company Market Presence, Merger Choice In The U.S. Pesticide Industry
Michael Ollinger, Jorge Fernandez-Cornejo
June 01, 1994
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.
View Paper 39 Pages 100352 Bytes
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CES-WP-94-7
The Span of the Effect of R&D in the Firm and Industry
James Adams, Adam Jaffe
May 01, 1994
Previous studies have found that the firm's own research and spillovers of research by related firms increase firm productivity. In contrast, in this paper we explore the impact of firm R&D on the productivity of its individual plants. We carry out this investigation of within firm R&D effects using a unique set of Census data. The data, which are from the chemicals industry, are a match of plant level productivity and other characteristics with firm level data on R&D of the parent company, cross-classified by location and applied product field. We explore three aspects of the span of effect of the firm's R&D: (i), the degree to which its R&D is "public" across plants; (ii), the extent of its localization in geographic space, and (iii), the breadth of its relevance outside the applied product area in which it is classified. We find that (i), firm R&D acts more like a private input which is strongly amortized by the number of plants in the firm; (ii), firm R&D is geographically localized, and exerts greater influence on productivity when it is conducted nearer to the plant; and (iii), firm R&D in a given applied product area is of limited relevance to plants producing outside that product area. Moreover, we find that while geographic localization remains significant, it diminishes over time. This trend is consistent with the effect of improved telecommunications on increased information flows within organizations. Finally, we consider spillovers of R&D from the rest of industry, finding that the marginal product of industry R&D on plant productivity, though positive and significant, is far smaller than the marginal product of parent firm's R&D.
View Paper 41 Pages 163010 Bytes
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CES-WP-94-3
Firms Started As Franchises Have Lower Survival Rates Than Independent Small Business Startups
Timothy Bates
May 01, 1994
Aspiring entrepreneurs choosing to become franchisees certainly expect to improve their chances of survival during the turbulent early years of business startup and operation. Alignment with a franchiser parent company offers the franchisee managerial assistance, access to financial capital, and access to markets via the right to utilize the parent company trademark. This study examines survival patterns among franchise and nonfranchise small firms started between 1984 and 1987: survival through late 1991 is tracked for all firms. Although the franchise operations are larger scale, better capitalized young firms, the independent business startups are found to be more profitable and their survival prospects are better than those of franchises.
View Paper 30 Pages 82944 Bytes
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