Productivity Growth in the Automobile Industry, 1970-1980: A Comparisonof Canada, Japan and the United States

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Productivity Growth in the Automobile Industry, 1970-1980: A Comparisonof Canada, Japan and the United States

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Melvyn A. Fuss
Leonard Waverman

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Leonard Waverman

Abstract

In this paper we calculate and analyze the automobile industries cost and productivity experience during the 1970 's in Canada, the U.S.and Japan. Utilizing an econometric cost function methodology, we are able to isolate the major source of short-run disequilibrium in this industry-variations' in capacity utilization-and analyze its effects on cost and total factor productivity (TFP) gross. This is achieved through a novel application of the Viner-Wng envelope theorem, which allows us to track short-run behavior utilizing what is essentially a long-run cost function.To striking empirical results energe. First, TFP grew much faster in the Japanese automobile industry (4.3% annum) than in the Canadian (1.4%) and U. S.(1.6%) industries. Second, the importance in analyzing variations in capacity utilization is confinned by the fact that failure to correct for this source of productivity change would have led to a 31% under estimate of long-run TFP growth in Canada arid a 37% underestimate for the United States.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1735.

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Date of creation: Aug 1991
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Handle: RePEc:nbr:nberwo:1735

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Norsworthy, J R & Malmquist, David H, 1983. "Input Measurement and Productivity Growth in Japanese and U.S. Manufacturing," American Economic Review, American Economic Association, vol. 73(5), pages 947-67, December. [Downloadable!] (restricted)
M. Denny & M. Fuss & J. D. May, 1981. "Intertemporal Changes in Regional Productivity in Canadian Manufacturing," Canadian Journal of Economics, Canadian Economics Association, vol. 14(3), pages 390-408, August. [Downloadable!] (restricted)
Kim, Moshe, 1984. "The Beneficiaries of Trucking Regulation, Revisited," Journal of Law & Economics, University of Chicago Press, vol. 27(1), pages 227-41, April.
M, et al Denny, 1981. "Estimating the Effects of Diffusion of Technological Innovations in Telecommunications: The Production Structure of Bell Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 14(1), pages 24-43, February. [Downloadable!] (restricted)
Ann F. Friedlaender & Clifford Winston & Kung Wang, 1983. "Costs, Technology, and Productivity in the U.S. Automobile Industry," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 1-20, Spring. [Downloadable!] (restricted)
Other versions:
- A. F. Friedlaender & C. Winston & D. K. Wang, 1982. "Costs, Technology and Productivity in the U. S. Automobile Industry," Working papers 294, Massachusetts Institute of Technology (MIT), Department of Economics.
Ernst R. Berndt & Melvyn A. Fuss, 1982. "Productivity Measurement Using Capital Asset Valuation to Adjust for Variations in Utilization," NBER Working Papers 0895, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Denny, Michael & Fuss, Melvyn, 1983. "A general approach to intertemporal and interspatial productivity comparisons," Journal of Econometrics, Elsevier, vol. 23(3), pages 315-330, December. [Downloadable!] (restricted)

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Nadiri, M. Ishaq & Prucha, Ingmar R., 1988. "Comparison And Analysis Of Productivity Growth And R&D Investment In The Electrical Machinery Industries Of The United States And Japan," Working Papers 88-22, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]

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