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Productivity Dispersion and Plant Selection in the Ready-Mix Concrete Industry

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Productivity Dispersion and Plant Selection in the Ready-Mix Concrete Industry

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Working Paper Number CES-11-25

Abstract

Productivity Dispersion and Plant Selection in the Ready-Mix Concrete Industry
Download Productivity Dispersion and Plant Selection in the Ready-Mix Concrete Industry [PDF - <1.0 MB]

This paper presents a quantitative model of productivity dispersion to explain why inefficient producers are slowly selected out of the ready-mix concrete industry. Measured productivity dispersion between the 10th and 90th percentile falls from a 4 to 1 difference using OLS, to a 2 to 1 difference using a control function. Due to volatile productivity and high sunk entry costs, a dynamic oligopoly model shows that to rationalize small gaps in exit rates between high and low productivity plants, a plant in the top quintile must produce 1.5 times more than a plant in the bottom quintile.

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The Productivity Advantage and Global Scope of U.S. Multinational Firms
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Nature Versus Nurture in the Origins of Highly Productive Businesses: An Exploratory Analysis of U.S. Manufacturing Establishments
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Page Last Revised - October 8, 2021
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