TY  - JOUR
AU  - Biesebroeck,Johannes Van
TI  - Complementarities in Automobile Production
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12131
PY  - 2006
Y2  - April 2006
UR  - http://www.nber.org/papers/w12131
L1  - http://www.nber.org/papers/w12131.pdf
N1  - Author contact info:
Johannes Van Biesebroeck
Centre for Economic Studies
K.U.Leuven
Naamsestraat 69
3000 Leuven
BELGIUM
Tel: +32 16 32 67 93
Fax: +32 16 32 67 96
E-Mail: jo.vanbiesebroeck@econ.kuleuven.be
AB  - The number of different car and light truck models produced in North America has increased enormously over the last decades. The data suggests that producing this increased variety of vehicles is associated with a productivity penalty. We show that manufacturers can adopt complementary activities to reduce this penalty.  Flexible technology, defined as the ability to assemble models derived from different %u201Cplatforms%u201D on the same assembly line, and bringing previously outsourced activities in-house are two such activities that we identify. Both are costly themselves, in terms of lower productivity, but they reduce the cost of producing greater variety. The results are robust to controlling for the endogeneity of the adoption decisions using activity-specific instruments, as proposed by Athey and Stern (2003).
ER  -