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The Effect of Technology Choice on Automobile Assembly Plant Productivity

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  • Johannes van Biesebroeck

    (University of Toronto, Canada)

Abstract

Productivity growth is usually represented by a continuous shift of the production or cost function. In the automobile industry, there is evidence of a more discrete change in the technology. I estimate a structural model of production and technology choice, using a panel of US automobile assembly plants from 1963 to 1996. New decomposition results suggest that plant-level changes, as opposed to compositional effects, are the most important determinant of aggregate productivity growth.

Suggested Citation

  • Johannes van Biesebroeck, 2002. "The Effect of Technology Choice on Automobile Assembly Plant Productivity," The Economic and Social Review, Economic and Social Studies, vol. 33(1), pages 65-73.
    • Handle: RePEc:eso:journl:v:33:y:2002:i:1:p:65-73
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    File URL: http://www.esr.ie/Vol33_1VanBieseroeck.pdf
    File Function: First version, 2002
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    References listed on IDEAS

    as
    1. James Levinsohn & Amil Petrin, 1999. "When Industries Become More Productive, Do Firms?," NBER Working Papers 6893, National Bureau of Economic Research, Inc.
    2. Diamond, Peter & McFadden, Daniel & Rodriguez, Miguel, 1978. "Measurement of the Elasticity of Factor Substitution and Bias of Technical Change," Histoy of Economic Thought Chapters, in: Fuss, Melvyn & McFadden, Daniel (ed.),Production Economics: A Dual Approach to Theory and Applications, volume 2, chapter 5, McMaster University Archive for the History of Economic Thought.
    3. John Kwoka, 2001. "Automobiles: The Old Economy Collides with the New," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 19(1), pages 55-69, August.
    4. Johannes van Biesebroeck, 2003. "Productivity Dynamics with Technology Choice: An Application to Automobile Assembly," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(1), pages 167-198.
    5. Fuss, Melvyn & McFadden, Daniel (ed.), 1978. "Production Economics: A Dual Approach to Theory and Applications," Elsevier Monographs, Elsevier, edition 1, number 9780444850133.
    6. Milgrom, Paul & Roberts, John, 1990. "The Economics of Modern Manufacturing: Technology, Strategy, and Organization," American Economic Review, American Economic Association, vol. 80(3), pages 511-528, June.
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    Cited by:

    1. TAKEDA Yosuke & UCHIDA Ichihiro, 2009. "Technological Externalities and Economic Distance: A case of the Japanese automobile suppliers," Discussion papers 09051, Research Institute of Economy, Trade and Industry (RIETI).
    2. J. Van Biesebroeck, 2008. "Aggregating and Decomposing Productivity," Review of Business and Economic Literature, KU Leuven, Faculty of Economics and Business (FEB), Review of Business and Economic Literature, vol. 0(2), pages 112-146.

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