An Alternative Theory of the Plant Size Distribution with an Application to Trade / Thomas J. Holmes, John J. Stevens.

Format:

Book

Author/Creator:

Holmes, Thomas J.

Contributor:

National Bureau of Economic Research.

Stevens, John J.

Series:

Working Paper Series (National Bureau of Economic Research) no. w15957.

NBER working paper series no. w15957

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2010.

Summary:

There is wide variation in the sizes of manufacturing plants, even within the most narrowly defined industry classifications used by statistical agencies. Standard theories attribute all such size differences to productivity differences. This paper develops an alternative theory in which industries are made up of large plants producing standardized goods and small plants making custom or specialty goods. It uses confidential Census data to estimate the parameters of the model, including estimates of plant counts in the standardized and specialty segments by industry. The estimated model fits the data relatively well compared with estimates based on standard approaches. In particular, the predictions of the model for the impacts of a surge in imports from China are consistent with what happened to U.S. manufacturing industries that experienced such a surge over the period 1997--2007. Large-scale standardized plants were decimated, while small-scale specialty plants were relatively less impacted.

Notes:

Print version record

April 2010.