Reallocation and Technology: Evidence from the US Steel Industry
- (pp. 131-71)
(Complimentary)
Abstract
We measure the impact of a drastic new technology for producing steel—the minimill—on industry-wide productivity in the US steel industry, using unique plant-level data between 1963 and 2002. The sharp increase in the industry's productivity is linked to this new technology through two distinct mechanisms: (i) the mere displacement of the older technology (vertically integrated producers) was responsible for a third of the increase in the industry's productivity, and (ii) increased competition, due the minimill expansion, drove a productivity resurgence at the surviving vertical integrated producers and, consequently, the productivity of the industry as a whole. (JEL D24, L13, L23, L61, M11, O31, O33)Citation
Collard-Wexler, Allan, and Jan De Loecker. 2015. "Reallocation and Technology: Evidence from the US Steel Industry." American Economic Review, 105 (1): 131-71. DOI: 10.1257/aer.20130090Additional Materials
JEL Classification
- D24 Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- L13 Oligopoly and Other Imperfect Markets
- L23 Organization of Production
- L61 Metals and Metal Products; Cement; Glass; Ceramics
- M11 Production Management
- O31 Innovation and Invention: Processes and Incentives
- O33 Technological Change: Choices and Consequences; Diffusion Processes