The duration of contract strikes in U.S. manufacturing

This paper develops new evidence on the hazard function for strike duration, and on cyclical changes in this function, using data on contract strikes in U.S. manufacturing industries. A flexible duration model is estimated, and it is found that the hazard rate is generally a U-shaped function of strike age. The level of industrial production is found to have a significant positive effect on the hazard rate: strike duration is countercyclical. A convenient parametric model of heterogeneity and duration dependence is introduced, in which the logit of the hazard rate is a polynomial function of strike age, up to a random individual effect drawn from a beta distribution. Estimates of this ‘beta-logit’ model indicate that it is difficult to detect the influence of unobserved heterogeneity on the aggregate hazard function for strike duration.     

The potential of group technology for U.S. manufacturing

Group Technology (GT) is an innovative approach to batch production which seeks to rationalize a variety of aspects of the conversion process by recognizing and exploiting the underlying sameness which exists among component parts, end items, raw materials and so forth. The majority of GT applications, however, focus on identifying and capitalizing on component part similarities. The central theme of GT when applied to this class of items is the formation of part families based on design or manufacturing similarities (or both).Although the basic principles of GT were described and applied overseas as early as 1950, it is only in the past ten years that any significant and sustained U.S. interest in GT has surfaced. In an effort, first, to determine the status of GT use in the U.S. and, second, to provide some insights as to the desirability of GT for U.S. manufacturers, data was collected on twenty U.S. firms known to use this innovation. A fifteen page questionnaire was employed to gather information on (1) the characteristics of these firms which use GT, (2) the ways in which GT has been applied at these companies and (3) the costs and benefits of these GT programs. The results of this survey, described below, provide an overview of GT practices in a sample of U.S. firms and indicate the potential usefulness of this innovation for a broad spectrum of U.S. manufacturers.The survey responses indicate that GT is a multifaceted tool which can be applied to a variety of problems in a variety of industrial settings. GT has been adopted by both large and small installations involved in the manufacture of metal items produced in small to medium quantity lots. Although no applications were identified outside metal working, the range of metalworking industries in which GT had been implemented is quite broad. Universally, GT was adopted in response to a particular problem or set of problems. Frequently, the need to curb excessive lead times motivated firms to introduce GT.In terms of implementing and using GT there were a number of interesting findings. First, the survey results confirm that GT is more than cellular manufacturing. In fact, the most popular application of GT was in manufacturing engineering, particularly as an aid in rationalizing the process planning function. Seventy-five percent of the firms had used GT in manufacturing engineering, while fifty-five percent had set up one or more production cells and an equal number had applied GT to product design. A second interesting finding was that, for the majority of firms, informal procedures for identifying and grouping similar items (i.e. by visual inspection or informed judgement) proved inadequate for pursuing GT applications. Consequently, eighty-five percent of the respondents noted that formal classification and coding schemes had been used to aid in identifying and exploiting item similarities. The survey also yielded interesting results with respect to the problems encountered in implementing GT. The firms reported that regardless of the type of application (i.e., product design, manufacturing engineering or cellular manufacturing), human resistance to change was the most serious impediment to successfully introducing GT. This obstacle could be surmounted, in most instances, by GT education and by involving those affected by GT as early in the implementation process as possible. A number of other problems specific to the type of GT application were also noted. With regard to the relative ease of implementing GT in various areas, the respondents generally agreed that establishing cells is fraught with more difficulties than are GT applications in manufacturing engineering or product design.With respect to costs and benefits, 85% of the firms reported that the actual benefits from GT met or exceeded their anticipated benefits. Specific savings frequently mentioned included reduced lead times and easier preparation of process plans. Costs for planning the GT program and for purchasing additional computer hardware and software were the most commonly cited GT-related expenses. In terms of prerequisites for success in implementing GT, the overwhelming majority of respondents agreed that two elements are essential. The first is GT education for all those (managers, supervisors and line personnel) who are affected by the changes that accompany GT's introduction. The second critical factor is top management's commitment to GT principles and support for the personnel involved in directing the GT efforts.Thus, to the extent that the firms included here are representative of a broader spectrum of U.S. manufacturers, one can conclude that in the presence of top management encouragement and a commitment to GT education, batch manufacturers involved in metalworking and facing any of a variety of problems could benefit from putting into practice GT principles.     

Sustainable development and research and development intensity in U.S. manufacturing firms

Across manufacturing sectors, mounting regulatory pressures motivate the adoption of innovative sustainable practices to help address and improve environmental performance. Sustainable practices, however, face many challenges to minimize negative environmental impacts while conserving energy and natural resources. This study seeks to understand the effect of research and development intensity on dimensions of environmental performance in manufacturing firms. Using data from U.S. corporations over the period from 1991 through 2015, we find that sustainable practices are associated with a higher level of negative environmental ratings. In addition, the level of environmental concerns tends to decrease with firm investments in research and development intensity over time. These findings suggest that bigger firms are likely to report a higher level of environmental concerns due to their experimentation with sustainable practices. These firms are also likely to reduce negative environmental ratings over time and realize economies of scale with sustainable manufacturing.     

Technical efficiency and region The U.S. manufacturing sector 1972–1977

In this paper we estimate the extent of technological bias in an interregional context for U.S. manufacturing during the period 1972–1977 using a factor augmenting production function approach. We present estimates of the elasticity of factor substitution for each of the 48 states in the sample using a variable elasticity of substitution production function. Next, we use these estimates to generate estimates of the rates of change in the efficiencies of capital and labor inputs and compare these estimates across states and census regions. We also examine and compare estimates of total factor productivity across states and regions. We ,find that the average annual rates of growth of capital efficiency during the period are 5.5 percent in the Northeast, 5.3 percent in the Northcentral, 5.6 percent in the West and 3.1 percent in the South. The rates of change of the efficiencies of labor are found to be negative across all regions except the South. The rates of change of total factor productivity are found to be 1.7 percent in the Northeast, 2.3 percent in the Northcentral, 2.4 percent in the West and 1.7 percent in the South. We also find that between 33 percent and 56 percent of the growth of output across regions is due to technical progress.     

Agency costs in U.S. manufacturing: An empirical measure using X-efficiency

By adapting the concept of X-inefficiency, the deadweight cost associated with agency problems is estimated for U.S. manufacturing industry. X-inefficiency theory postulates that agent’s opportunistic behavior will lead to second-best outcomes in imperfect markets. When the methodology is applied to the 1986/87 fiscal year, thirty industries are identified as X-inefficient. The total deadweight agency cost generated by these industries amounts to some $76 million. On average, in any given industry, agency costs represent two-tenths of one percent of that industry’s annual sales.     

Investment and employment in manufacturing in U.S. metropolitan areas 1960–1976

This paper develops a simple vintage model of the relation between investment and employment in manufacturing. Parameters of the model are estimated using time series data for the US taken from the Surveys and Censuses of Manufactures conducted from 1954–1976. The results indicate that the age of the manufacturing capital stock was increasing in most major metropolitan areas during this period. Due to capital aging, the nature of technological change, and the pattern of depreciation, the amount of annual investment per worker required to sustain employment in manufacturing rose substantially. The dispersion of growth rates across areas also increased.     

Productivity trends in U.S. manufacturing: Evidence from the NQ and AIM cost functions

In this paper, we take the econometric approach to productivity measurement in United States manufacturing, using KLEM data over the period from 1953 to 2001. We are also interested in technical change bias, price elasticities, and elasticities of substitution in the U.S. manufacturing industry. We present an empirical comparison and evaluation of the effectiveness of four well-known flexible cost functions—the locally flexible generalized Leontief (see Diewert [1971. An application of the Shephard duality theorem: a generalized Leontief production function. Journal of Political Economy 79, 481–507]), translog (see Christensen et al. [1975. Transendendal logarithmic utility functions. American Economic Review 65, 367–364]), and normalized quadratic (see Diewert and Wales [1987. Flexible functional forms and global curvature conditions. Econometrica 55, 43–68])—and the globally flexible asymptotically ideal model (see Barnett et al. [1991. Semi-nonparametric Bayesian estimation of the asymptotically ideal production model. Journal of Econometrics 49, 5–50]), the latter modified to introduce technical change by means of Thomsen's [2000. Short cuts to dynamic factor demand modelling. Journal of Econometrics 97, 1–23] factor-augmenting efficiency index approach.     

Regional heterogeneity and U.S. presidential elections: Real-time 2020 forecasts and evaluation

This paper exploits cross-sectional variation at the level of U.S. counties to generate real-time forecasts for the 2020 U.S. presidential election. The forecasting models are trained on data covering the period 2000–2016, using high-dimensional variable selection techniques. Our county-based approach contrasts the literature that focuses on national and state level data but uses longer time periods to train their models. The paper reports forecasts of popular and electoral college vote outcomes and provides a detailed ex-post evaluation of the forecasts released in real time before the election. It is shown that all of these forecasts outperform autoregressive benchmarks. A pooled national model using One-Covariate-at-a-time-Multiple-Testing (OCMT) variable selection significantly outperformed all models in forecasting the U.S. mainland national vote share and electoral college outcomes (forecasting 236 electoral votes for the Republican party compared to 232 realized). This paper also shows that key determinants of voting outcomes at the county level include incumbency effects, unemployment, poverty, educational attainment, house price changes, and international competitiveness. The results are also supportive of myopic voting: economic fluctuations realized a few months before the election tend to be more powerful predictors of voting outcomes than their long-horizon analogs.     

Regional policy handles in econometric models : Evidence from U.S. development outlays

Our econometric model of growth in state employment includes outlays for 56 Federal programs in the model structure. We found that: (1) there are positive, significant coefficients for most grant and loan guarantee outlays in most industries; (2) outlays do act with a lag of one to three years and possibly longer, (3) disbursements (i.e., cash outlays) are an important explanatory variable which follow obligations (legally binding commitments) with a lag. These findings support our contention that lagged policy handles should be included in the structure of regional econometric models and that disbursements should replace the commonly-used variable, obligations.     

Does pay affect productivity or react to it?: Examination of U.S. manufacturing

There may be a bi-directional relationship between wages and labor productivity. According to conventional theory, employers reward improvements in productivity by raising pay. It also has been argued that wage increases can provide an incentive to improve productivity. This study applies a technique by Geweke to identify the feedback between pay and productivity in U.S. manufacturing. For the 1949–1998 period, measures of directional feedback indicate that both “pay as reward” and “pay as incentive” behaviors have occurred, but the results vary across manufacturing subsectors.     

A profit function approach to measuring productivity growth: The case of U.S. manufacturing

This article proposes a method of estimating productivity growth using an estimated profit function. The approach has the advantage of incorporating endogenous changes in profit-maximizing output levels that would result from productivity changes. As with the cost function, it can be easily adapted to accomodate the presence of quasi-fixed factors. The article first develops the methodology and shows the equivalence between the proposed measure and other measures of productivity based on cost or production functions. An empirical application to the measurement of productivity changes in the U.S. manufacturing industry is presented next. The profit-function measure is compared to a nonparametric measure based on the same data and to the results of other studies of U.S. manufacturing.The refereeing process of this paper was handled through J. deMelo.     

U.S. productivity in agriculture and R&D

This paper examines the impact of R&D on multifactor productivity in the U.S. agricultural sector over the 1910–1990 period. We use the Bennet–Bowley indicator to measure agricultural productivity based on a multiple output-multiple input technology. We demonstrate the relationship between the price dependent Bennet–Bowley indicator and the Luenberger productivity indicator which is constructed from directional distance functions without requiring price information. These performance measures are dual to the profit function which arguably makes them especially useful in the agricultural setting. We employ time-series techniques to investigate the effect of R&D on the pattern of productivity growth. We find that we cannot reject the presence of a cointegrating relationship between the two series and that productivity growth in the U.S. agriculture responds positively to R&D expenditure with a lag of between four and ten periods.

U.S. Strategic Trade Policy and the Competitiveness of the U.S. Construction Industry in Developing Country Markets

SUMMARY

U.S. government trade policy increasingly reflects “strategic trade” beliefs that, because competition in markets is imperfect, governments can act strategically to affect trade flows and enhance national welfare. The U.S. National Export Strategy targets the infrastructure sector in twelve developing countries as a strategic opportunity for U.S. construction firms. This paper examines whether U.S. government export promotion initiatives effectively implement strategic trade policy by providing appropriate support to these firms in that target market. It concludes that, within limits, they do.