Working Paper: NBER ID: w9026
Authors: Andrew B. Bernard; J. Bradford Jensen
Abstract: This paper examines the causes of manufacturing plant deaths within and across industries in the U.S. from 1977-1997. The effects of international competition from low wage countries, exporting, ownership structure, product diversity, productivity, geography, and plant characteristics are considered. The probability of shutdowns is higher in industries that face increased competition from low-income countries, especially for low-wage, labor-intensive plants within those industries. Conditional on industry and plant characteristics, closures occur more often at plants that are part of a multi-plant firm and at plants that have recently experienced a change in ownership. Plants owned by U.S. multinationals are more likely to close than similar plants at non-multinational firms. Exits occur less frequently at multi-product plants, at exporters, at plants that pay above average wages, and at large, older, more productive and more capital-intensive plants.
Keywords: No keywords provided
JEL Codes: D2; F1; L2; L6
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increased competition from low-wage countries (F66) | plant shutdowns (L94) |
| ownership structure (G32) | plant shutdowns (L94) |
| plant characteristics (Q16) | plant shutdowns (L94) |
| multiplant firms (L22) | lower likelihood of shutdowns (J65) |
| changed ownership (H13) | higher likelihood of shutdowns (L94) |
| number of products produced (D20) | likelihood of exit (J63) |
| capital and skill intensity (J24) | better survival rates (I14) |