Reallocation and Technology: Evidence from the U.S. Steel Industry
We measure the impact of a drastic new technology for producing steel - the minimill - on the aggregate productivity of U.S. steel producers, using unique plant-level data between 1963 and 2002. We find that the sharp increase in the industry's productivity is linked to this new technology, and operates through two distinct mechanisms. First, minimills displaced the older technology, called vertically integrated production, and this reallocation of output was responsible for a third of the increase in the industry's productivity. Second, increased competition, due to the expansion of minimills, drove a substantial reallocation process within the group of vertically integrated producers, driving a resurgence in their productivity, and consequently of the industry's productivity as a whole.
-
-
Copy CitationAllan Collard-Wexler and Jan De Loecker, "Reallocation and Technology: Evidence from the U.S. Steel Industry," NBER Working Paper 18739 (2013), https://doi.org/10.3386/w18739.Download Citation
Non-Technical Summaries
- Roughly half of the productivity gain in the steel industry came from efficient minimills displacing older and less productive vertically...
Published Versions
Allan Collard-Wexler & Jan De Loecker, 2015. "Reallocation and Technology: Evidence from the US Steel Industry," American Economic Review, American Economic Association, vol. 105(1), pages 131-71, January. citation courtesy of 
More from the NBER
In addition to working papers, the NBER disseminates affiliates’ latest findings through a range of free periodicals — the NBER Reporter, the NBER Digest, the Bulletin on Health, and the Bulletin on Entrepreneurship — as well as online conference reports, video lectures, and interviews.
