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NTC Data Collection and Analysis
has added two new investigators to this project, upon the completion
of preliminary work by Drs. Datta and Malhotra.
Mikail Kouliavtsev will pursue a different approach for estimation
using the panel data that will include two-stage estimation, with growth
rates to correct for multi-colinearity.
The firm analysis will be taken over by Philip Russel who will
bring a Finance perspective to the analysis of firm survival.
Dr. Christoffersen continues to collect the relevant new literature
and is compiling the datasets used in the project analyses, including the
Compustat database, which has been installed and is being used to run
various reports using firm level data. Dr. Christoffersen visited
textile mills to interview financial officers and product development
people, June 2001; this information supplements and informs the
further statistical investigation of industry conditions.
sources at the National Bureau of Economic Research and the Bureau of the
Labor Statistics have been collected and organized along with the data on
Textile mills. The data
contains information about employees, payroll information, number of hours
of labor input in the textile industry, value added by manufacture, and
new capital expenditures. The
data pertains to Broadwoven fabric mills (cotton, manmade fiber, and silk,
wool), Narrow fabric mills, Knitting mills (women’s hosiery, except
socks, hosiery, knit outwear mills, knit underwear mills, lace and warp
knit fabrics mills, knitting mills, n.e.c.), Textile finishing, except
wool (finishing plants, cotton, finishing plants, manmade, finishing
plants, n.e.c.), carpets and rugs, yarn and thread mills (yarn spinning
mills, throwing and winding mills, and thread mills), miscellaneous
textile goods (coated fabrics, not rubberized, Tire cord and fabrics,
Nonwoven fabrics, Cordage and twine, and Textile goods, n.e.c.).
The data set is for period 1992 to 1996. Data from Compustat is supplemented with data is from the
annual survey of manufacturers, published by the U.S. Department of
Commerce. The data will be used to build “Total Factor Productivity
Index” and also to study the factors that influence/define total factor
productivity in the U.S. Textile Industry.
Dr. Russel: Anecdotal
evidence suggests that the U.S. textile industry is in a downward spiral
with lackluster profitability and record plant closings.
To date, no formal attempt has been made to investigate whether
such seemingly poor performance is due to firm-specific factors or due to
overall economic and trade environment facing the firms (over which
admittedly, firms have little or no control).
Philip Russel will provide a financial perspective by performing a
detailed cross-sectional and time series analysis at the firm-level
spanning a ten-year period.
1993-2002. This will be complemented with the study of macro environment
facing the firms competing in the textile industry.
Taken together, financial and economic analysis will enhance our
understanding of the performance of various firms in the industry and
provide a useful framework for identifying the causes of firm failure and
survival. This will enable us to recommend suitable strategies for
sustaining profitability in the long-run and for equipping firms to better
insulate themselves from the unexpected (and uncontrollable) shocks.
Kouliavtsev: will work on constructing reliable estimates of
total factor productivity for the textile industry. These estimates
can then be used to estimate a model which includes the presence of
foreign competition (imports) and its effect on productivity. The
results will help us understand the dynamic response of firms in the
textile industry to increasing import competition. Also, this
framework will allow us to measure and evaluate the effects of
investment in R&D and information technology. Panel data methods
will be employed to control for fixed and random effects in the
has finished analyzing panel data. We model growth in
productivity as a function of capital-labor ratio, export market, and
tariff policy, using panel data for 18 sectors of the textile
industry. The model shows
growth in productivity to be negatively related to capital-labor ratio
and tariff rates (statistically significant) and positively related to
export markets and economies of scale (statistically significant).
Having been corrected for autocorrelation, this panel analysis
is considered over.
Dr. Datta has
concluded her work at the industry level. She has run regressions to study
growth effects in addition to level effects studied initially.
This includes looking at the role of economies of scale (firm
size), import penetration, R&D employment and IT in explaining total
factor productivity growth in the U.S. Textile Industry. The results from
this work will be presented at a Productivity Studies conference in June.
We added data on R&D expenditures for the industry, as well as patent
data, further enriching this study. This supplements the initial industry
trends have been plotted such as productivity indexes and IT expenditures,
at a two digit level SIC code.