CES-WP-95-14
Innovation and Regulation in the Pesticide Industry
Michael Ollinger, Jorge Fernandez-Cornejo
December 01, 1995
This paper examines the hypothesis that regulation negatively affects pesticide innovation, causes pesticide companies to introduce more harmful pesticides, and discourages firms from developing pesticides for minor crop markets. The results confirm that pesticide regulation adversely affects innovation and discourages firms from developing pesticides for minor crop markets. Contrary to the hypothesis, however, regulation encourages firms to develop less toxic pesticides. Estimates suggest that it requires about $29 million in industry expenditures on health and environmental testing to affect the toxicity of one new pesticide.
 View Paper 62 Pages 150528 Bytes
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CES-WP-95-13
Exploring The Role Of Acquisition In The Performance Of Firms: Is The
Sang Nguyen, Robert Mcguckin
November 01, 1995
In this article, we examine the effect of acquisitions on productivity performance of acquiring firms using the conventional regression analysis and a method of productivity decomposition. Our empirical work uses both plant- and firm-level data taken from the Longitudinal Research Database (LRD) on the entire population of U.S. food manufacturing firms that operated continuously during 1977-87. We find that (1) acquisitions had a significant, positive effect on acquiring firms' productivity growth, but this effect becomes insignificant when only firm-level data on multi-unit firms are included in the regressions; and (2) the decomposition results show that while the productivity contribution of the external component (acquired plants) is positive, the contribution of the internal component (existing plants) is negative; the two components offset each other leaving productivity of multi-unit acquiring firms virtually unchanged after acquisitions. These results suggest that assessing the impact of acquisitions on the structure and performance of firms requires a careful look at the individual components (i.e., plants) of the firms, particularly for large multi-unit firms. Micro and macro-data, Statistical Analysis and international Comparison, Silvia Biffigandi, (ed), Italy: Physica-Verlag, (December 1998), pp. 1-23.
View Paper 37 Pages 142336 Bytes
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CES-WP-95-12
The Missing Link: Technology, Productivity, and Investment
Laura Power
October 01, 1995
This paper examines the relationship between productivity, investment, and age for over 14,000 plants in the U.S. manufacturing sector in the 1972-1988 period. Productivity patterns vary significantly due to plant heterogeneity. Productivity first increases and then decreases with respect to plant age, and size and industry are systematically correlated with productivity and productivity growth. However, there is virtually no observable relationship between investment and productivity or productivity growth. Overall, the results indicate that plant heterogeneity and fixed effects are more important determinants of observable productivity patterns than sunk costs or capital reallocation. Key Words: productivity, investment, technical change
View Paper 20 Pages 105472 Bytes
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CES-WP-95-11
Counting The Self-Employed From Two Perspectives: Household Vs. Business Sample Data
Alfred Nucci, Richard Boden
August 01, 1995
This study compares the number and attributes of self-employed workers using the Characteristics of Business Owners and Current Population Survey data series. Both sources of data have been widely used in empirical studies of entrepreneurship/self-employment. Substantial and inexplicable differences were found in the two data series' estimates of the number of self-employed men and women for both reference years. In terms of individual attributes, the CBO and CPS appear to report reasonably similar profiles of self-employed individuals in terms of marital status and geographic location, and similar systematic gender differences in the industrial distributions of these individuals. However, in terms of other attributes captured by both data series, including age, the two series exhibit notable dissimilarities. Small Business Economics, 9:5:437-436.
View Paper 26 Pages 57344 Bytes
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CES-WP-95-10
The Worker-Establishment Characteristics Database
Kenneth Troske
June 01, 1995
A data set combining information on the characteristics of both workers and their employers has long been a grail for labor economists. The reason for this interest is that while a number of theoretical models in labor economics stress the importance of employer-employee matching in determining labor market outcomes, almost all empirical work relies on either worker surveys with little information about employers or establishment surveys with little information about workers. The Worker-Establishment Characteristic Database (WECD) represents just such an employer-employee-matched database. Containing 199,557 manufacturing workers matched to 16,144 manufacturing establishments, the WECD is the largest worker-firm matched data set available for the U.S. This paper describes how this data set was constructed and assesses the usefulness of these data for economic research. In addition, I discuss some of the issues that can be addressed using employer-employee-matched data and plans for creating future versions of the WECD. Forthcoming in Labor Statistics Measurement Issue, eds. John haltiwanger, Marilyn manser, and Robert Topel. Chicago: NBER.
View Paper 51 Pages 154624 Bytes
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CES-WP-95-8
The Impact Of Ownership Change On Employment, Wages, And Labor Productivity In U.S. Manufacturing 1977-87
Sang Nguyen, Robert Mcguckin, Arnold Reznek
April 01, 1995
This paper reports on the impact of ownership change on productivity, wages, and employment in U.S. food manufacturing for the period 1977-87. Our analysis is based on both firm and plant level data taken from the U. S. Census Bureau's Longitudinal Research Database (LRD). Three principal results emerge from the analysis. First, ownership change is positively associated with productivity and wage growth, although the effects are significantly smaller for large plants. Second, ownership change appears to be associated with increases, not decreases, in employment at operating plants. Third, plants changing ownership show a greater likelihood of survival than those that do not change owners. These findings run counter to the notion that mergers and acquisitions cut wages and reduce employment. Finally, neither of the first two results are observed when firm level data are used for the analysis. This suggests that firm level data hide important dynamic activities within the firm. Thus, plant level data are necessary for studying the structure and performance of firms over time. Labor Statistics Measurement Issues, eds. John Haltiwanger, Marilyn Manser, and Robert Topel. Chicago: NBER, pp. 207-246.
View Paper 73 Pages 156672 Bytes
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CES-WP-95-7
Using Matched Client And Census Data To Evaluate The Performance Of The Manufacturing Extension Partnership
Ron Jarmin
April 01, 1995
This paper proposes a framework for evaluating the Manufacturing Extension Partnership (MEP). The MEP is administered by the National Institute of Standards and Technology (NIST) as part of its effort to improve the global competitiveness of U.S. manufacturing industries. As the name implies, the MEP is modelled after agricultural extension. Rather than farmers the MEP's target population is small and medium sized manufacturers, generally those with less than 500 employees. The MEP currently supports 44 manufacturing extension centers around the country. These centers provide technical and business assistance for manufacturers much as county extension agents do for farmers. The goal of evaluation is to see if MEP engagements lead to positive outcomes from the view of important MEP stakeholders (e.g., MEP clients, MEP centers, NIST, state and local governments and Congress). These outcomes are discussed in McGuckin and Redman (1995) and include: Process Outcomes (e.g., adoption of a new technology by a client); Intermediate Outcomes (e.g., reduction in the clients defect rate); Business Outcomes (e.g., survival and profits) and Policy Outcomes (increases in employment,wages and/or exports). The evaluation framework described in this paper has two components. The first component is an evaluation dataset which contains measures of many of the program outcomes listed above for both MEP clients and a representative control group of non- clients. This dataset will be constructed by linking MEP client records with plant level Census data housed at the Center for Economic Studies of the Census Bureau. The Census data provides measures of several outcome and control variables which are comparable across both plants and time. The Census data include observations for all manufacturing plants in the U.S. from which representative control groups can be constructed. The MEP client records provide data on the type and intensity of extension engagements. Linking these rich sources of information yields a comprehensive and powerful dataset for MEP evaluation. The second component is an evaluation methodology which exploits this rich dataset to make statistical inferences about the impact of MEP services, while carefully controlling for other influences. By using this methodology, we can address many of the shortcomings which plagued previous attempts to evaluate extension services. In addition to evaluation, the dataset described in this paper may be used to profile the characteristics of MEP clients and compare them to non-clients. The Census data contain the complete universe of manufacturing establishments in the U.S.
View Paper 47 Pages 89088 Bytes
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CES-WP-95-6
Technology Locks, Creative Destruction And Non-Convergence In Productivity Levels
Douglas Dwyer
April 01, 1995
This paper presents a simple solution to a new model that seeks to explain the distribution of plants across productivity levels within an industry, and empirically confirms some key predictions using the U.S. textile industry. In the model, plants are locked into a given productivity level, until they exit or retool. Convex costs of adjustment captures the fact that more productive plants expand faster. Provided there is technical change, productivity levels do not converge; the model achieves persistent dispersion in productivity levels within the context of a distortion free competitive equilibrium. The equilibrium, however, is rather turbulent; plants continually come on line with the cutting edge technology, gradually expand and finally exit or retool when they cease to recover their variable costs. The more productive plants create jobs, while the less productive destroy them. The model establishes a close link between productivity growth and dispersion in productivity levels; more rapid productivity growth leads to more widespread dispersion. This prediction is empirically confirmed. Additionally, the model provides an explanation for S-shaped diffusion.
View Paper 57 Pages 865280 Bytes
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CES-WP-95-5
Whittling Away At Productivity Dispersion
Douglas Dwyer
March 01, 1995
In any time period, in any industry, plant productivity levels differ widely and this dispersion is persistent. This paper explores the sources of this dispersion and their relative magnitudes in the textile industry. Plants that are measured as being more productive but pay higher wages are not necessarily more profitable; wage dispersion can account for approximately 15 percent of productivity dispersion. A plant that is highly productive today may not be as productive tomorrow. I develop a new method for measuring ex-ante dispersion and the percentage of dispersion "explained" by mean reversion. Mean reversion accounts for as much as one half the observed productivity dispersion. A portion of the dispersion, however, appears to reflect real quality differences between plants; plants that are measured as being more productive expand faster and are less likely to exit.
View Paper 51 Pages 372736 Bytes
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CES-WP-95-4
Capital Structure and Product Market Behavior: An Examination of Plant Exit and Investment Decisions
Gordon Phillips, Dan Kovenock
March 01, 1995
This paper examines whether capital structure decisions interact with product market characteristics to influence plant closing and investment decisions. The empirical evidence in this paper shows that a firm's capital structure, plant level efficiency, and industry capacity utilization are significant determinants of plant (dis)investment decisions. We find that the effects of high leverage on investment and plant closing are significant when the industry is highly concentrated. Following their recapitalizations, firms in industries with high concentration are more likely to close plants and less likely to invest. In addition, we find that rival firms are less likely to close plants and more likely to invest when the market share of leveraged firms is higher. Review of Financial Studies, Vol. 10, No. 3, 1997.
View Paper 62 Pages 144384 Bytes
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