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Linking investment spikes and productivity growth


  • Pinar Geylani


  • Spiro Stefanou



We investigate the relationship between productivity growth and investment spikes using Census Bureau’s plant-level dataset for the U.S. food manufacturing industry. There are differences in productivity growth and investment spike patterns across different sub-industries and food manufacturing industry in general. Our study finds empirical support for the learning-by-doing hypothesis by identifying some cases where the impact of investment spikes on TFP growth presents a U-shaped investment age–productivity growth pattern. However, efficiency and the learning period associated with investment spikes differ among plants across industries. The most pronounced impact of investment age on productivity growth (5.3 % for meat products, 4% for dairy products, and 2.8 % in all food manufacturing plants) occurs during the fifth year of post-investment spike. Thus, in general, the productivity gains tend to be fully realized with a 5-year technology learning period for this industry. Copyright The Author(s) 2013

Suggested Citation

  • Pinar Geylani & Spiro Stefanou, 2013. "Linking investment spikes and productivity growth," Empirical Economics, Springer, vol. 45(1), pages 157-178, August.
  • Handle: RePEc:spr:empeco:v:45:y:2013:i:1:p:157-178 DOI: 10.1007/s00181-012-0599-8

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    References listed on IDEAS

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    1. repec:kap:sbusec:v:49:y:2017:i:4:d:10.1007_s11187-017-9859-5 is not listed on IDEAS
    2. repec:spr:cejnor:v:26:y:2018:i:1:d:10.1007_s10100-017-0473-z is not listed on IDEAS
    3. Kapelko, Magdalena & Oude Lansink, Alfons & Stefanou, Spiro E., 2014. "Assessing dynamic inefficiency of the Spanish construction sector pre- and post-financial crisis," European Journal of Operational Research, Elsevier, vol. 237(1), pages 349-357.
    4. Kapelko, Magdalena & Oude Lansink, Alfons & Stefanou, Spiro E., 2015. "Analyzing the impact of investment spikes on dynamic productivity growth," Omega, Elsevier, vol. 54(C), pages 116-124.
    5. Marco Grazzi & Nadia Jacoby & Tania Treibich, 2016. "Dynamics of investment and firm performance: comparative evidence from manufacturing industries," Empirical Economics, Springer, vol. 51(1), pages 125-179, August.
    6. Papageorgiou, Theofanis & Michaelides, Panayotis G. & Milios, John, 2009. "Economic Fluctuations, Cyclical Regularities and Technological Change: The U.S. Food Sector (1958–2006)," MPRA Paper 67115, University Library of Munich, Germany.

    More about this item


    Productivity growth; Lumpy investments; Micro data; U.S. Food industry; D24; L66; 033;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco


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