Linking investment spikes and productivity growth
Lumpy investments, Micro data, Productivity growth, U.S. Food industry
We investigate the relationship between productivity growth and investment spikes using Census Bureau's plant-level dataset for the U.S. food manufacturing industry. There are differences in productivity growth and investment spike patterns across different sub-industries and food manufacturing industry in general. Our study finds empirical support for the learning-by-doing hypothesis by identifying some cases where the impact of investment spikes on TFP growth presents a U-shaped investment age-productivity growth pattern. However, efficiency and the learning period associated with investment spikes differ among plants across industries. The most pronounced impact of investment age on productivity growth (5.3 % for meat products, 4% for dairy products, and 2.8 % in all food manufacturing plants) occurs during the fifth year of post-investment spike. Thus, in general, the productivity gains tend to be fully realized with a 5-year technology learning period for this industry. © 2012 The Author(s).
Geylani, P., & Stefanou, S. (2013). Linking investment spikes and productivity growth. Empirical Economics, 45 (1), 157-178. https://doi.org/10.1007/s00181-012-0599-8