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Reallocation and Technology: Evidence from the US Steel Industry

Author(s): Collard-Wexler, Allan; De Loecker, Jan

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Abstract: We measure the impact of a drastic new technology for producing steel-the minimill-on industry-wide productivity in the US steel industry, using unique plant-level data between 1963 and 2002. The sharp increase in the industry's productivity is linked to this new technology through two distinct mechanisms: (i) the mere displacement of the older technology (vertically integrated producers) was responsible for a third of the increase in the industry's productivity, and (ii) increased competition, due the minimill expansion, drove a productivity resurgence at the surviving vertical integrated producers and, consequently, the productivity of the industry as a whole.
Publication Date: Jan-2015
Citation: Collard-Wexler, Allan, De Loecker, Jan. (2015). Reallocation and Technology: Evidence from the US Steel Industry. American Economic Review, 105 (1), 131 - 171. doi:10.1257/aer.20130090
DOI: doi:10.1257/aer.20130090
ISSN: 0002-8282
Pages: 131 - 171
Type of Material: Journal Article
Journal/Proceeding Title: American Economic Review
Version: Final published version. Article is made available in OAR by the publisher's permission or policy.



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