CES-WP-97-18

Measuring The Performance Of Government Technology Programs: Lessons From Manufacturing Extension

Bradford Jensen, Ron Jarmin

December 01, 1997

Managers of government technology programs are under increasing pressure to demonstrate the effectiveness of their programs. In this paper we examine the issues involved in credibly evaluating such programs in the context of recent efforts to evaluate manufacturing extension programs in the U.S. We provide a stylized model of the dynamic competitive environment in which the plants and firms targeted by these programs operate and discuss its implications for evaluation. We compare and contrast the various methodologies and data sets used to evaluate manufacturing extension. We conclude that the best currently available method for measuring the overall effectiveness of programs such as manufacturing extension is to combine program administrative data with existing panel data sets. In Policy Evaluation in Innovation and Technology, OECD, Paris 1997.

View Paper   40 Pages 173273 Bytes

CES-WP-97-17

Productivity Adjustments and Learning-by-Doing as Human Capital

Jim Bessen

November 01, 1997

This paper measures plant-level productivity gains associated with learning curves across the entire manufacturing sector. We measure these gains at plant startups and also after major employment changes. We find: 1.) The gains are strongly associated with a variety of human capital measures implying that learning-by-doing is largely a firm-specific human capital investment. 2.) This implicit investment is large; many plants invest as much in learning-by-doing as they invest in physical capital and much more than they invest in formal job training. 3.) This investment differs persistently over industries and is higher with greater R&D. 4.) Consistent with a learning-by-doing interpretation, the human capital investment is much larger following employment decreases than increases. We conclude that learning-by-doing is a major factor in wage determination, technical progress and asymmetric employment adjustment costs.

View Paper   36 Pages 177788 Bytes

CES-WP-97-16

An Applied General Equilibrium Model Of Moroccan Trade Liberalization Featuring External Economies

C Krizan

November 01, 1997

Since the 1920's economists have wrestled with the effects of external economies on trade liberalization. In this paper I show that under extreme conditions, externalities can reverse the gains from trade found in perfectly competitive trade models. However, the externalities needed to generate this result, even under the worst possible conditions (all expanding industries are subject to negative externalities, all contracting industries have positive externalities) are orders of magnitude larger than those estimated in Krizan (1997). This suggests that the presence of external economies of scale does not provide a credible argument for protectionism. On the other hand, the CGE model showed that external effects can increase the welfare gains from trade liberalization, but the combined effect is still small compared to other policy options. This finding contrasts sharply with many models featuring internal returns to scale that are able to generate large welfare benefits from trade liberalization.

View Paper   30 Pages 121337 Bytes

CES-WP-98-3

Geographic Concentration as a Dynamic Process

Guy Dumais, Glenn Ellison, Edward Glaeser

October 01, 1997

This degree of geographic concentration of individual manufacturing industries in the U.S. has declined only slightly in the last twenty years. At the same time, new plant births, plant expansions, contractions and closures have shifted large quantities of employment across plants, firms and locations. This paper uses data from the Census Bureau's Longitudinal Research Database to examine how relatively stable levels of geographic concentration emerge from this dynamic process. While industries agglomeration levels tend to remain fairly constant we find that there is a greater variation in the locations of these agglomerations. We then decompose aggregate concentration changes into portions attributable to plant births, expansions, contractions, and closures, and find that the location choices of new firms and differences in growth rates have played the most significant role in reducing levels of geographic concentration, while plant closures have tended to reinforce agglomeration. Finally, we look at coagglomeration patterns to test three of Marshall's theories of industry agglomeration: (1) agglomeration saves transport costs by proximity to input suppliers or final consumers, (2) agglomeration allows for labor market pooling, and (3) agglomeration facilitates intellectual spillovers. While there is some truth behind all three theories, we find that industrial location is far more driven by labor mix than by any of the other explanatory variables.

View Paper   50 Pages 382265 Bytes

CES-WP-97-15

The Structure of Firm R&D and the Factor Intensity of Production

James Adams

October 01, 1997

This paper studies the influence of the structure of firm R&D, industry R&D spillovers, and plant level physical capital on the factor intensity of production. By the structure of firm R&D we mean its distribution across states and products. By factor intensity we mean the cost shares of variable factors, which in this paper are blue collar labor, white collar labor, and materials. We characterize the effect of the structure of firm R&D on factor intensity using a Translog cost function with quasi-fixed factors. This cost function gives rise to a system of variable cost shares that depends on factor prices, firm and industry R&D, and physical capital.

View Paper   43 Pages 111677 Bytes

CES-WP-97-14

Understanding Selection Processes: Organization Determinants and Performance Outcomes

Peter Cappelli, Steffi Wilk

October 01, 1997

We use an establishment-level survey to examine the predictors of different types of selection practices as well as the relationship of different selection practices to organizational performance. We find that a wide range of contingencies in the organization, including job requirements, organizational size, union status, salary, and training, predict the intensity and the types of selection practices used. Further, we find that selection intensity has a significant and negative relationship with organizational sales, other things equal, that is driven by the use of less valid selection techniques.

View Paper   62 Pages 101648 Bytes

CES-WP-97-10

Output Price And Markup Dispersion In Micro Data: The Roles Of Producer And Heterogeneity And Noise

Mark Roberts, Dylan Supina

August 01, 1997

This paper provides empirical evidence on the extent of producer heterogeneity in the output market by analyzing output price and price-marginal cost markups at the plant level for thirteen homogeneous manufactured goods. It relies on micro data from the U.S. Census of Manufactures over the 1963-1987 period. The amount of price heterogeneity varies substantially across products. Over time, plant transition patterns indicate more persistence in the pricing of individual plants than would be generated by purely random movements. High-price and low-price plants remain in the same part of the price distribution with high frequency, suggesting that underlying time-invariant structural factors contribute to the price dispersion. For all but two products, large producers have lower output prices. Marginal cost and the markups are estimated for each plant. The markup remains unchanged or increases with plant size for all but four of the products and declining marginal costs play an important role in generating this pattern. The lower production costs for large producers are, at least partially, passed on to purchasers as lower output prices. Plants with the highest and lowest markups tend to remain so over time, although overall the persistence in markups is less than for output price, suggesting a larger role for idiosyncratic shocks in generating markup variation.

View Paper   56 Pages 116961 Bytes

CES-WP-97-9

Environmental Regulation, Investment Timing, and Technology Choice

Wayne Gray, Ronald Shadbegian

July 01, 1997

View Paper   47 Pages 74125 Bytes

CES-WP-97-8

Manufacturing Plant Location: Does State Pollution Regulation Matter?

Wayne Gray

July 01, 1997

This paper tests whether differences across states in pollution regulation affect the location of manufacturing activity in the U.S. Plant-level data from the Census Bureau's Longitudinal Research Database is used to identify new plant births in each state over the 1963-1987 period. This is combined with several measures of state regulatory intensity, including business pollution abatement spending, regulatory enforcement activity, congressional pro-environment voting, and an index of state environmental laws. A significant connection is found: states with more stringent environmental regulation have fewer new manufacturing plants. These results persist across a variety of econometric specifications, and the strongest regulatory coefficients are similar in magnitude to thos4e on other factors expected to influence location, such as unionization rates. However, a subsample of high-pollution industries, which might have been expected to show much larger impacts, gets similar coefficients. This raises the possibility that differences between states other than environmental regulation might be influencing the results.

View Paper   43 Pages 58479 Bytes

CES-WP-97-7

The Silver Lining Of Rust Belt Manufacturing Decline: Killing Off Pollution Externalities

Matthew Kahn

June 01, 1997

This paper expoloits a unique merger of air quality and county manufacturing data to quantify manufacturing's pollution externality by industry. By linking pollution to local production, I estimate cross-sectional pollution production regressions. Rust Belt cities that were endowed with the largest concentrations of the dirtiest industries experience reduced pollution externalities. I estimate that Gary, Indiana adn Pittsburgh, Pennsylvania experienced substantial pollution declines as local primary metals activity declined in the 1970s and 1980s.

View Paper   53 Pages 122875 Bytes