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

58 Pages Posted: 2 Sep 2011

Date Written: August 1, 2011

Abstract

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.

JEL Classification: L13, L6, D24

Suggested Citation

Collard-Wexler, Allan, Productivity Dispersion and Plant Selection in the Ready-Mix Concrete Industry (August 1, 2011). US Census Bureau Center for Economic Studies Paper No. CES-WP- 11-25, Available at SSRN: https://ssrn.com/abstract=1920703 or http://dx.doi.org/10.2139/ssrn.1920703

Allan Collard-Wexler (Contact Author)

Duke University ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
261
Abstract Views
1,321
Rank
250,087
PlumX Metrics