Returns to scale in small and large U.S. manufacturing establishments

Nguyen, Sang V.; Reznek, Arnold P.

doi:10.1007/bf00400025

Cited by 31 publications

(27 citation statements)

References 19 publications

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“…The transcendental logarithmic (translog) form has received a great deal of attention and application in empirical work. While it shares second-order approximation properties with other flexible forms, the translog has the fewest free parameters, and estimates of the parameters tend to converge more quickly than estimates from other forms (Nguyen & Reznek 1991 Initially, a three-factor translog production function was specified, including capital, labor, and materials in the production of output Q. In addition, a qualitative variable representing the location of the establishment in a rural or urban location was included: Initial estimation showed that the results were sensitive to which definition of urban was chosen.…”

Section: Model Specificationmentioning

confidence: 99%

“…In this case, ZEF parameter estimates may vary on the basis of which share equations are directly estimated (Berndt 1990). However, because the capital stock and capital cost measures are considered the least reliable element of the Census data (see below for a su=ary of problems of capital stock and capital cost measurement), it is co=on practice when using this data to drop the capital cost-share equation (Nguyen and Reznek 1991).…”

Section: Model Specificationmentioning

confidence: 99%

“…However, there are a number of factors that vary across industries and that may contribute to the impact of location on the productivity of firms. For example, Nguyen and Reznek (1991) found that small, single-unit wood furniture manufacturing plants were more productive than their counterparts that were part of a multi-unit firm.…”

Section: Other Effectsmentioning

confidence: 99%

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The Influence of Location on Productivity: Manufacturing Technology in Rural and Urban Areas

Martin¹,

McHugh²,

Johnson³

1993

Growth and Change

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Policies to counter the growing discrepancy between economic opportunities in rural and urban areas have focused predominantly on expanding manufacturing in rural areas. Fundamental to the design of these strategies are the relative costs of production and productivity of manufacturing in rural and urban areas. This study aims to develop information that can be used to assess the productivity of manufacturing in rural and urban areas. Production functions are estimated in the meat products and household furniture industries to investigate selected aspects of the effect of rural, small urban, and metropolitan location on productivity. The results show that the effect of location on productivity varies with industry, size, and the timing of the entry of the establishment into the industry. While the analysis is specific to two industries, it suggests that development policies targeting manufacturing can be made more effective by focusing on industries and plants with characteristics that predispose them to the locations being supported. iii Disciplines Agricultural and Resource Economics | Agricultural Economics | Biotechnology | Growth and Development AbstractPolicies to counter the growing discrepancy between economic opportunities in rural and

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Section: Model Specificationmentioning

confidence: 99%

Section: Model Specificationmentioning

confidence: 99%

See 1 more Smart Citation

The Influence of Location on Productivity: Manufacturing Technology in Rural and Urban Areas

Martin¹,

McHugh²,

Johnson³

1993

Growth and Change

View full text Add to dashboard Cite

show abstract

“…Others (e.g. Nguyen and Reznek (1990)) have found no significant relationship between establishment size and productivity. Because the theoretical effects offset one another, the productivity of U.S. business establishments is not expected to be related to establishment size.…”

Section: Theoretical Predictionsmentioning

confidence: 94%

The Productivity Advantage and Global Scope of U.S. Multinational Firms

Mataloni

2011

SSRN Journal

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This paper examines whether the productivity of U.S. business establishments is related to the extent to which their parent firms are globally engaged-from being an exporter to being a fledgling multinational that has taken a few cautious forays into foreign markets to being a seasoned multinational with extensive foreign operations. Theory suggests that multinationals possess proprietary assets that confer a productivity advantage over their domestically-oriented rivals, and that this advantage is positively correlated with the global scope of a firm's operations. That is, those firms with the greatest productivity advantage are able to absorb the costs and overcome the risks of operating in a wide range of foreign countries, from those where it is relatively riskfree and economical to operate, to those where it is risky, difficult, and costly. This connection between the multinational's widening of its geographic scope of operations and its productivity can be self-reinforcing. Once a multinational has successfully operated in a risky environment, it may benefit from learning effects that can lower the cost and risk of further enlargement of geographic scope. The positive correlation between a firm's global engagement and its level of productivity has already been demonstrated. This paper extends that research by testing whether the correlation holds up when productivity is measured at the level of the individual establishment, rather than at the level of the consolidated business enterprise.It also examines whether the correlation between global engagement and productivity exists in non-manufacturing industries. Finally, it examines whether linkages between the multinational's domestic and foreign operations, in the form of imports of goods by the parent company from its foreign affiliates, enhance the productivity of the multinational's domestic business establishments.The findings confirm the positive correlation between global scope and productivity and demonstrate that it holds for both manufacturing and non-manufacturing industries. The effect of imports of goods from foreign affiliates on the productivity of the establishments of their parent firm depend on the geographic location of the affiliates:Imports from affiliates in high-income countries tend to be associated with high productivity whereas those from affiliates in low-income countries tend to be associated with low productivity. The study was made possible by combining BEA enterprise-level data on the U.S. operations of U.S. multinational firms with data on all U.S. business establishments collected by the Census Bureau in the U.S. economic census covering 2002.

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“…We have annual data between 1970 and 2004 with observations for 115 countries, augmented with GDP/capita data from the Penn World Tables (Summers-Heston). 9 We construct a variable p with the proportion of managerial jobs. Managerial jobs include for example general and corporate managers, science and business professionals, but not office clerks and salespersons.…”

Section: Evidence On Occupational Switchingmentioning

confidence: 99%

Occupational Choice and Development

Eeckhout

Jovanovic

2007

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The rise in world trade since 1970 has raised international mobility of labor services. We study the effect of such a globalization of the world's labor markets. We find that when people can choose between wage work and managerial work, the output gains are U-shaped: A worldwide labor market raises output by more in the rich and the poor countries, and by less in the middle-income countries. This is because the middle-income countries experience the smallest change in the factor-price ratio, and where the option to choose between wage work and managerial work has the least value in the integrated economy. Our theory also establishes that after economic integration, the high skill countries see a disproportionate increase in managerial occupations. Using aggregate data on GDP, openness and occupations from 115 countries, we find evidence for these patterns of occupational choice.

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Returns to scale in small and large U.S. manufacturing establishments

Cited by 31 publications

References 19 publications

The Influence of Location on Productivity: Manufacturing Technology in Rural and Urban Areas

The Influence of Location on Productivity: Manufacturing Technology in Rural and Urban Areas

The Productivity Advantage and Global Scope of U.S. Multinational Firms

Occupational Choice and Development

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