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Library | Item Barcode | Call Number | Material Type | Item Category 1 | Status |
|---|---|---|---|---|---|
Searching... | 30000001689870 | HD9725.C38 1990 | Open Access Book | Book | Searching... |
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Summary
Summary
Using the recently developed stochastic frontier production function, Richard Caves and David Barton estimate the degree of technical efficiency in nearly 350 U.S. manufacturing industries and explain the variation in efficiency among industries. They reach a number of strong conclusions, including the observation that import competition and flexible employment arrangements are beneficial whereas corporate diversification hurts efficiency. Caves and Barton describe and evaluate the stochastic frontier production function, which allows them to credibly estimate technical inefficiency. Using U.S. Census data on individual manufacturing establishments, they obtain the frontier production functions for over 300 industries. They then propose hypotheses derived from modern developments in economic analysis and theory which explain differences in efficiency. The hypotheses embrace many dimensions of competition and economic organization (both enterprise and labor), as well as sources of heterogeneous productivity levels such as capital-vintage differences, product differentiation, and differential rents to innovation Among studies of efficiency that have been conducted over the past three decades, Efficiency in U.S. Manufacturing Industriesis unmatched in the breadth and depth of its coverage. The hypotheses tested range more widely, and the analysis is extended to cover differences in efficiency among small and large firms and in the dynamic effects of efficiency differences on industries' rates of productivity growth. The review of the existing literature is unusually complete. Richard Caves is Professor of Economics and Business Administration at Harvard University. David R. Barton is an economist with the International Trade Administration, U.S. Department of Commerce.
Reviews 1
Choice Review
Caves (economics, Harvard) and Barton (International Trade Administration, US Department of Commerce) attempt to measure technical efficiency (cost minimization, not resource allocation) in US manufacturing for 1977 using establishments in 4-digit SIC industries. Their econometric procedures rely on the estimation of stochastic frontier-production functions specified in transcendental logarithmic (translog) form. Their procedures are fully and clearly set out, and their conclusions (e.g., technical efficiency is enhanced by domestic competition and by free international trade) are appropriately supported and carefully stated. Highly recommended for research libraries and for college libraries serving undergraduates who have mastered considerable econometrics. -R. A. Miller, Wesleyan University
