Patterns of Plant Adjustment

46 Pages Posted: 10 Nov 2000

See all articles by Plutarchos Sakellaris

Plutarchos Sakellaris

University of Maryland - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: August 2000


This paper provides a description of the dynamic choices of manufacturing plants when they undertake rapid adjustment in output. The focus is on episodes that involve lumpy adjustment in capital or employment. I examine the behavior of variables such as capital utilization, hours per worker, overtime use, capacity utilization, materials and energy use. Finally I describe the observed patterns of productivity during those adjustment episodes and propose some hypotheses that seem to fit them. The costs associated with output adjustment seem to arise from building and destroying a particular organization of the structure of production and associated worker experience. As such they are related to learning-by-doing and investment in specific training.

Keywords: capital investment, employment adjustment, capacity utilization, productivity, learning effects, specific training

JEL Classification: E22, D24, L60

Suggested Citation

Sakellaris, Plutarchos, Patterns of Plant Adjustment (August 2000). Available at SSRN: or

Plutarchos Sakellaris (Contact Author)

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679

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