Plant-Level Dynamics and Aggregate Productivity Growth in the Meat Processing Industry: Evidence from Longitudinal Data
Agribusiness: An International Journal, Forthcoming
Posted: 8 Apr 2005
This paper examines how plant-level dynamics contribute to aggregate productivity growth in the Turkish meat processing industry. An aggregate productivity decomposition approach that utilizes plant-level longitudinal data is used to achieve this goal. Our results are consistent with the empirical literature in the sense that productivity enhancement within existing plants is the main source of aggregate productivity growth in this sector. However, our analysis generally suggest that plants that exit the meat processing industry tend to be more productive than entering plants, especially in the post-economic crisis period studied. Even though the latter insight is not consistent with the existing empirical literature, we show that these results tend to support Caballero and Hammour's (2000) contention that institutional factors such as industry structure (i.e. mature vs. infant industry) and economic crisis conditions (i.e. pre- vs. post-crisis periods) affects the nature of plant dynamics' contributions to aggregate productivity growth. Overall, our results reveal that industry-specific institutional factors must be taken into consideration when shaping policies aimed to improve and sustain aggregate productivity growth.
Keywords: Aggregate Productivity Decomposition, Food Industrial Organization, Plant Dynamics, Total Factor Productivity, Meat Processing Industry
JEL Classification: D24, L25, O12
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