Productivity Growth in the Automobile Industry, 1970-1980: A Comparisonof Canada, Japan and the United States
AbstractIn 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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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1735.
Date of creation: Aug 1991
Date of revision:
Publication status: published as Melvyn Fuss, Leonard Waverman. "Productivity Growth in the Motor Vehicle Industry, 1970-1984: A Comparison of Canada, Japan, and the United States," in Charles R. Hulten, editor, "Productivity Growth in Japan and the United States" University of Chicago Press (1991)
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- 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.
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- Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
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