This paper examines the role of sectors in aggregate convergence for 14 OECD countries during 1970-1987. The major finding is that manufacturing shows little evidence of either labor productivity or multifactor productivity convergence, while other sectors, especially services, are driving the aggregate convergence result. To determine the robustness of the convergence results, the paper introduces a new measure of multifactor productivity which avoids many problems inherent to traditional measures of total factor productivity when comparing productivity levels. The lack of convergence in manufacturing is robust to the method of calculating multifactor productivity.

Plant shutdowns shape industry productivity, the dynamics of employment, and industrial restructuring. Plant closures account for more than half of gross job destruction in U.S. manufacturing. This paper examines the effects of firm structure on U.S. manufacturing plant closures. Plants belonging to multiplant firms and those owned by U.S. multinationals are less likely to exit. However, the superior survival chances are due to the characteristics of the plants rather than the nature of the firms. Controlling for plant and industry attributes, we find that plants owned by multiunit firms and U.S. multinationals are much more likely to close.

This paper examines the factors that increase the probability of entry into exporting. Using a panel of U.S. manufacturing plants, we test for the role of plant characteristics, spillovers from neighboring exporters, entry costs, and government export promotion expenditures. Entry and exit in the export market by U.S. plants is substantial, past exporters are apt to reenter, and plants are likely to export in consecutive years. However, we find that entry costs are significant and spillovers from the export activity of other plants are negligible. State export promotion expenditures have no significant effect on the probability of exporting. Plant characteristics, especially those indicative of past success, strongly increase the probability of exporting, as does changing industries.

In this paper, we test whether aggregate productivity movements, especially convergence, are also reflected at the industry level.Using a new result on the asymptotic normality of panel unit root estimators, we find evidence for convergence in total factor productivity for sectors such as services and construction in 14 OECD countries from 1970-1987.However, surprisingly, we find that convergence does not hold for the manufacturing sector.Convergence in total industry occurs as a result of the declining share of manufacturing and the growing share of sevices in these countries.

This paper documents the existence and characteristics of US firms that do not manufacture themselves, but nonetheless are heavily involved in the production of goods. These factoryless goods producing firms (FGPFs) are formally in the wholesale sector but, unlike traditional wholesale firms, FGPFs design the goods they sell and coordinate production activities. FGPFs in the wholesale sector are larger and younger, pay higher wages, span more sectors and had more manufacturing employment in previous years compared to traditional wholesalers. FGPFs are more likely to import than typical wholesalers, though their imports constitute a smaller share of their total domestic activity.

Comparing Apples to Oranges: Productivity Convergence and Measurement across Industries and Countries: Reply by Andrew B. Bernard and Charles I. Jones. Published in volume 91, issue 4, pages 1168-1169 of American Economic Review, September 2001

This paper develops a multicountry model of international trade that provides a simple microfoundation for buyer-seller relationships in trade. We explore a rich data set that identifies buyers and sellers in trade and establish a set of basic facts that guide the development of the theoretical model. We use predictions of the model to examine the role of buyer heterogeneity in a market for firm-level adjustments to trade shocks, as well as to quantitatively evaluate how firms’ marginal costs depend on access to suppliers in foreign markets.

This paper examines determinants of Olympic success at the country level. Does the United States win its fair share of Olympic medals? Why does China win only 6% of the medals even though it has one-fifth of the world's population? We consider the role of population and economic resources in determining medal totals from 1960 to 1996. At the margin, population and income per capita have similar effects, suggesting that both a large population and high per capita GDP are needed to generate high medal totals. We also provide out-of-sample predictions for the 2000 Olympics in Sydney.

We reconcile trade theory with plant-level export behavior, extending the Ricardian model to accommodate many countries, geographic barriers, and imperfect competition. Our model captures qualitatively basic facts about U.S. plants: (i) productivity dispersion, (ii) higher productivity among exporters, (iii) the small fraction who export, (iv) the small fraction earned from exports among exporting plants, and (v) the size advantage of exporters. Fitting the model to bilateral trade among the United States and 46 major trade partners, we examine the impact of globalization and dollar appreciation on productivity, plant entry and exit, and labor turnover in U.S. manufacturing.

This paper examines the importance of buyer-supplier relationships, geography and the structure of the production network in firm performance. We develop a simple model where firms can outsource tasks and search for suppliers in different locations. Low search and outsourcing costs lead firms to search more and find better suppliers. This in turn drives down the firm's marginal production costs. We test the theory by exploiting the opening of a high-speed (Shinkansen) train line in Japan which lowered the cost of passenger travel but left shipping costs unchanged. Using an exhaustive dataset on firms' buyer-seller linkages, we find significant improvements in firm performance as well as creation of new buyer-seller links, consistent with the model.