An examination of the use of manufacturing technologies and performance implications in US plants with different export intensities

Abstract

¹ In theory, competition improves productivity and performance; trade liberalisation, which increases imports/exports, brings more competition. Using two large-scale survey responses from over 1000 manufacturers collected during two different time periods while US exports were growing in an environment of trade liberalisation, this study examines the effectiveness of technologies, over time, in manufacturing plants with varying export intensities. We find manufacturing technology use increases with exports and exporters report significant gains in plant performance over time. The study considers hard technologies (i.e. technologies involving capital-intensive equipment in manufacturing operations) and soft technologies (i.e. technologies involving planning and administrative components) to understand the distinct dynamic impact of the use of these technologies among plants exporting with varying intensities. Manufacturing plants are categorised into high, medium, and non-exporting based on the plant’s exports as a percent of total output. The results of this study indicates that exporters engage in more skilled use of these technologies than non-exporters. Further, exporters not only have higher skilled use of manufacturing technologies from non-exporters, but they also expand the scope of technologies that they skillfully employ in their operations. We find that over the course of liberalised trade regime, medium exporters get closer to high exporters in their skilled use of manufacturing technologies providing evidence of learning effect from exporting. Finally, higher skilled use of manufacturing technologies by high exporters translates into lower rejects and shorter lead times. However, non-exporters were not able to gain similar benefits from using manufacturing technologies.

Keywords:

• skilled use of manufacturing technologies
• exports
• technology bundles
• manufacturing performance
• quality
• rejects
• lead time
• trade liberalisation
• international economics

Acknowledgments

The authors are grateful to the National Science Foundation for its grant, and the support of the Manufacturing Institute of the National Association of Manufacturers who enabled this study. The authors are solely responsible for the study’s findings, and conclusions. Hubert Jerome, Graduate Research Assistant, assisted with database creation.

Notes

1. Current address for Cigdem Ataseven is Operations and Supply Chain Management Department, Monte Ahuja College of Business, Cleveland State University, Cleveland, OH 44114, USA.