Productivity patterns in the United States food and kindred products industries: A plant-level analysis, 1972--1995

This project presents the measurement of total factor productivity growth (TFP) and its components for the U.S. Food and Kindred Products industry by focusing on each food sub-industry separately with the available establishment level data from 1973--1995. The objectives of this thesis are: (a) to estimate models measuring total factor productivity growth and its components, scale and technical change effects at the plant-level; (b) to evaluate the average TFP, scale effect, technical change effect, input bias of technical change, and returns to scale to gauge the performance of each sub-industry in the food and kindred products industry through time; (c) to analyze the impact of age and size effects on productivity growth patterns and its decomposition; (d) to document the nature of plant level investment (smooth or lumpy) in each sub-industry and in all food and kindred products industry.;Persistent productivity differentials across establishments are observed in the Food and Kindred Products Industry as well as movement at the plant level across productivity groups over time. For the food industry in aggregate, productivity dispersion throughout the time period indicate no significant trend, implying the gap of 20.5% between the highest and lowest quartile plants is constant over time. The scale effect offers a greater contribution to the TFP growth measurement than the technical change for the plants that are mostly in the lowest TFP quartile group (rank 0) and the highest TFP quartile group (rank 3) across sub-industries and all food manufacturing plants together, while the exogenous technical change effect has the most significant contribution to TFP growth measurement for half of the sub-industries for the plants in TFP rank 1 and all of the subindustries for the plants which are in TFP rank 2.;Technical change is biased toward the capital, energy and material inputs, in general, with technical change being biased toward the labor input in 5 sub-industries and biased away from labor in aggregate. The contribution of the largest investment episodes to aggregate investment across all sub-industries and all food plants pooled together is evaluated and the lumpiness of plant-level investments in each sub-industry is documented.