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Productivity Growth Patterns in U.S. Food Manufacturing: Case of Dairy Products Industry

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  • Pinar Celikkol
  • Spiro Stefanou

Abstract

A panel constructed from the Census Bureau’s Longitudinal Research Database is used to measure total factor productivity growth at the plant-level and analyzes the multifactor bias of technical change at three-digit product group level containing five different four-digit sub-group categories for the U.S. dairy products industry from 1972 through 1995. In the TFP growth decomposition, analyzing the growth and its components according to the quartile ranks show that scale effect is the most significant element of TFP growth except the plants in the third quartile rank where technical change dominates throughout the time periods. The exogenous input bias results show that throughout the time periods, technical change is 1) capital-using; 2) labor-using after 1980; 3) material-saving except 1981-1985 period; and, 4) energy-using except 1981-1985 and 1991-1995 periods. Plant productivity analysis indicate that less than 50% of the plants in the dairy products industry stay in the same category, indicating considerable movement between productivity rank categories. Investment analysis results indicate that plant-level investments are quite lumpy since a relatively small percent of observations account for a disproportionate share of overall investment. Productivity growth is found to be positively correlated with recent investment spikes for plants with TFP ranking in the middle two quartiles and uncorrelated with plants in the smallest and largest quartiles. Similarly, past TFP growth rates present no significant correlation with future investment spikes for plants in any quartile.

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File URL: ftp://ftp2.census.gov/ces/wp/2004/CES-WP-04-08.pdf
File Function: First version, 2004
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Bibliographic Info

Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 04-08.

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Length: 74 pages
Date of creation: May 2004
Date of revision:
Handle: RePEc:cen:wpaper:04-08

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Related research

Keywords: Total Factor Productivity Growth; Input Bias of Technical Change; Lumpy Investment; U.S. Dairy Products Manufacturing;

References

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  1. Ariel Pakes & Richard Ericson, 1989. "Empirical Implications of Alternative Models of Firm Dynamics," NBER Working Papers 2893, National Bureau of Economic Research, Inc.
  2. Hall, Bronwyn H. & Mairesse, Jacques, 1995. "Exploring the relationship between R&D and productivity in French manufacturing firms," Journal of Econometrics, Elsevier, vol. 65(1), pages 263-293, January.
  3. Robert E. Hall, 1988. "The Relation Between Price and Marginal Cost in U.S. Industry," NBER Working Papers 1785, National Bureau of Economic Research, Inc.
  4. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
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  6. Catherine J. Morrison, 1997. "Structural Change, Capital Investment and Productivity in the Food Processing Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(1), pages 110-125.
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  8. Bahk, Byong-Hong & Gort, Michael, 1993. "Decomposing Learning by Doing in New Plants," Journal of Political Economy, University of Chicago Press, vol. 101(4), pages 561-83, August.
  9. Catherine J. Morrison, 1989. "Unraveling the Productivity Growth Slowdown in the U.S., Canada and Japan: The Effects of Subequilibrium, Scale Economies and Markup," NBER Working Papers 2993, National Bureau of Economic Research, Inc.
  10. Pinar Celikkol & Spiro Stefanou, 2004. "Productivity Growth Patterns in U.S. Food Manufacturing: Case of Meat Products Industry," Working Papers 04-04, Center for Economic Studies, U.S. Census Bureau.
  11. John R. Baldwin & Paul K. Gorecki, 1990. "Firm Entry and Exit in the Canadian Manufacturing Sector," Working Papers 767, Queen's University, Department of Economics.
  12. Alfons Oude Lansink & Spiro E. Stefanou, 1997. "Asymmetric Adjustment of Dynamic Factors at the Firm Level," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1340-1351.
  13. Hopenhayn, Hugo A, 1992. "Entry, Exit, and Firm Dynamics in Long Run Equilibrium," Econometrica, Econometric Society, vol. 60(5), pages 1127-50, September.
  14. Phoebus J Dhrymes, 1991. "The Structure Of Production Technology Productivity And Aggregation Effects," Working Papers 91-5, Center for Economic Studies, U.S. Census Bureau.
  15. Binswanger, Hans P., 1973. "The Measurement Of Technical Change Biases With Many Factors Of Production," Staff Papers 14205, University of Minnesota, Department of Applied Economics.
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