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Understanding the life-cycle of a manufacturing plant

Author

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  • Aubhik Khan

Abstract

In the final article this quarter, Aubhik Khan wonders: What determines whether a manufacturing plant survives? Is it access to credit markets? Or does learning about plants' profitability over time determine survival? Should government policy play a role in helping plants survive? In "Understanding the Life-Cycle of a Manufacturing Plant," Khan discusses the collateral and learning views as two possible explanations for a typical plant's life-cycle. He concludes that although it remains unclear as to which explanation is more relevant, the two views have very different implications for what government can do and what it should do.

Suggested Citation

  • Aubhik Khan, 2002. "Understanding the life-cycle of a manufacturing plant," Business Review, Federal Reserve Bank of Philadelphia, issue Q2, pages 25-32.
  • Handle: RePEc:fip:fedpbr:y:2002:i:q2:p:25-32
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    File URL: http://www.phil.frb.org/files/br/brq202ak.pdf
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    References listed on IDEAS

    as
    1. Gertler, Mark & Gilchrist, Simon, 1993. " The Role of Credit Market Imperfections in the Monetary Transmission Mechanism: Arguments and Evidence," Scandinavian Journal of Economics, Wiley Blackwell, vol. 95(1), pages 43-64.
    2. Hall, Bronwyn H, 1987. "The Relationship between Firm Size and Firm Growth in the U.S. Manufacturing Sector," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 583-606, June.
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    Cited by:

    1. Jacob Funk Kirkegaard, 2005. "Outsourcing and Offshoring: Pushing the European Model Over the Hill, Rather Than Off the Cliff!," Working Paper Series WP05-1, Peterson Institute for International Economics.

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    Keywords

    Manufactures ; Plant shutdowns;

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