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Factoryless Goods Producers in the US

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Abstract

This paper documents the extent and characteristics of plants and firms in the US that are outside the manufacturing sector according to official government statistics but nonetheless are heavily involved in activities related to the production of manufactured goods. Using new data on establishment activities in the Census of Wholesale Trade conducted by the US Bureau of the Census in 2002 and 2007, this paper provides evidence on so-called ?factoryless goods producers? (FGPs) in the US economy. FGPs are formally in the wholesale sector but, unlike traditional wholesale establishments, FGPs design the goods they sell and coordinate the production activities. This paper documents the extent of FGPs in the wholesale sector and how they differ from traditional wholesalers in terms of their employment, wages, productivity and output. Reclassifying FGP establishments to the manufacturing sector using our definition would have shifted at least 595,000 workers to as many as 1,311,000 workers from wholesale to manufacturing sectors in 2002 and at least 431,000 workers to as many as 1,934,000 workers in 2007.

Suggested Citation

  • Bernard, Andrew, 2013. "Factoryless Goods Producers in the US," CEPR Discussion Papers 9644, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:9644
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    Cited by:

    1. Holger Breinlich & Anson Soderbery & Greg C. Wright, 2018. "From Selling Goods to Selling Services: Firm Responses to Trade Liberalization," American Economic Journal: Economic Policy, American Economic Association, vol. 10(4), pages 79-108, November.
    2. Marcel P. Timmer & Erik Dietzenbacher & Bart Los & Robert Stehrer & Gaaitzen J. Vries, 2015. "An Illustrated User Guide to the World Input–Output Database: the Case of Global Automotive Production," Review of International Economics, Wiley Blackwell, vol. 23(3), pages 575-605, August.
    3. Fariha Kamal, 2019. "A Portrait of US Factoryless Goods Producers," NBER Chapters, in: Challenges of Globalization in the Measurement of National Accounts, pages 425-447, National Bureau of Economic Research, Inc.
    4. Amador, João & Cabral, Sónia, 2014. "Global value chains: surveying drivers and measures," Working Paper Series 1739, European Central Bank.
    5. Teresa C. Fort, 2019. "Comment on "A Portrait of US Factoryless Goods Producers"," NBER Chapters, in: Challenges of Globalization in the Measurement of National Accounts, pages 447-450, National Bureau of Economic Research, Inc.
    6. Richard Baldwin & Tadashi Ito, 2021. "The smile curve: Evolving sources of value added in manufacturing," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(4), pages 1842-1880, November.
    7. Werner Hölzl & Klaus Friesenbichler & Agnes Kügler & Michael Peneder & Andreas Reinstaller & Gerhard Schwarz, 2016. "Österreich 2025 – Industrie 2025: Wettbewerbsfähigkeit, Standortfaktoren, Markt- und Produktstrategien und die Positionierung österreichischer Unternehmen in der internationalen Wertschöpfungskette," WIFO Studies, WIFO, number 59184.
    8. Matthieu Crozet & Emmanuel Milet, 2017. "Should everybody be in services? The effect of servitization on manufacturing firm performance," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(4), pages 820-841, December.
    9. David Byrne & Brian K. Kovak & Ryan Michaels, 2013. "Price and Quality Dispersion in an Offshoring Market: Evidence from Semiconductor Production Services," NBER Working Papers 19637, National Bureau of Economic Research, Inc.
    10. Pol Antràs & Teresa C. Fort & Felix Tintelnot, 2017. "The Margins of Global Sourcing: Theory and Evidence from US Firms," American Economic Review, American Economic Association, vol. 107(9), pages 2514-2564, September.
    11. Morikawa, Masayuki, 2016. "Factoryless goods producers in Japan," Japan and the World Economy, Elsevier, vol. 40(C), pages 9-15.
    12. David Hummels & Jakob R. Munch & Chong Xiang, 2018. "Offshoring and Labor Markets," Journal of Economic Literature, American Economic Association, vol. 56(3), pages 981-1028, September.
    13. Campbell, Douglas L., 2020. "Relative Prices and Hysteresis: Evidence from US Manufacturing," European Economic Review, Elsevier, vol. 129(C).
    14. Virginia Di Nino, 2015. "�The phenomenal CAT�: firms clawing the goods of others," Questioni di Economia e Finanza (Occasional Papers) 281, Bank of Italy, Economic Research and International Relations Area.
    15. Diane Coyle & David Nguyen, 2019. "No plant, no problem? Factoryless manufacturing and economic measurement," Economic Statistics Centre of Excellence (ESCoE) Discussion Papers ESCoE DP-2019-15, Economic Statistics Centre of Excellence (ESCoE).
    16. Wen Chen & Reitze Gouma & Bart Los & Marcel P. Timmer, 2017. "Measuring the income to intangibles in goods production: a global value chain approach," WIPO Economic Research Working Papers 36, World Intellectual Property Organization - Economics and Statistics Division.
    17. João Amador & Sónia Cabral, 2014. "Global Value Chains: Surveying Drivers, Measures and Impacts," Working Papers w201403, Banco de Portugal, Economics and Research Department.
    18. Talan İşcan, 2015. "Windfall Resource Income, Productivity Growth, and Manufacturing Employment," Open Economies Review, Springer, vol. 26(2), pages 279-311, April.
    19. Andrew B. Bernard & Teresa C. Fort, 2015. "Factoryless Goods Producing Firms," American Economic Review, American Economic Association, vol. 105(5), pages 518-523, May.

    More about this item

    Keywords

    Contract manufacturing services; Manufacturing plants and firms; Offshoring; Outsourcing; Product design; Wholesale plants and firms;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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