The Life Cycle of Plants in India and Mexico / Chang-Tai Hsieh, Peter J. Klenow.

Format:

Book

Author/Creator:

Hsieh, Chang-Tai.

Contributor:

National Bureau of Economic Research.

Klenow, Peter J.

Series:

Working Paper Series (National Bureau of Economic Research) no. w18133.

NBER working paper series no. w18133

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2012.

Summary:

In the U.S., the average 40 year old plant employs almost eight times as many workers as the typical plant five years or younger. In contrast, surviving Indian plants exhibit little growth in terms of either employment or output. Mexico is intermediate to India and the U.S. in these respects: the average 40 year old Mexican plant employs twice as many workers as an average new plant. This pattern holds across many industries and for formal and informal establishments alike. The divergence in plant dynamics suggests lower investments by Indian and Mexican plants in process efficiency, quality, and in accessing markets at home and abroad. In simple GE models, we find that the difference in life cycle dynamics could lower aggregate manufacturing productivity on the order of 25% in India and Mexico relative to the U.S.

Notes:

Print version record

June 2012.