Structural Change Within Versus Across Firms: Evidence from the United States

Xiang Ding, Teresa Fort, Stephen Redding and Peter Schott
Additional contact information
Xiang Ding: Harvard University
Teresa Fort: Tuck School of Business
Peter Schott: Yale University

Working Papers from Princeton University. Economics Department.

Abstract: US manufacturing’s employment share fell from 27 to 9 percent between 1977 and 2016. A third of this reallocation is driven by a shift towards services – particularly professional services and retail – within continuing manufacturers. We show that firms with in-house professional service establishments are larger, grow faster, more likely to survive and more diversified than firms without such plants. These trends motivate a model of within-firm structural transformation in which non-manufacturing workers complement physical production, and where physical input price reductions induce firms to reallocate towards services. This mechanism is consistent with US firms’ responses to growing trade with China.

Keywords: structural change; multi-product firms; globalization (search for similar items in EconPapers)
JEL-codes: L11 L21 L25 L60 (search for similar items in EconPapers)
Date: 2019-09
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Structural Change Within Versus Across Firms: Evidence from the United States (2022)
Working Paper: Structural change within versus across firms: evidence from the United States (2022)
Working Paper: Structural Change Within versus Across Firms: Evidence from the United States (2022)
Working Paper: Structural change within versus across firms: evidence from the United States (2022)
Working Paper: Structural Change Within versus Across Firms: Evidence from the United States (2022)
Working Paper: Structural Change Within Versus Across Firms: Evidence from the United States (2022)
Working Paper: Structural Change Within Versus Across Firms: Evidence from the United States (2022)
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