Just in time and vertical agglomerations in the United States auto industry [electronic resource]

1992

1 online resource (219 p.)

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Just-in-time (JIT), a production technique employing relatively low inventories, has been introduced widely in the U.S. automotive industry. Some social scientists have suggested that JIT has increased both productivity and vertical agglomeration economies. Vertical agglomeration economies exist when assembly plants derive benefits from locating close to parts manufacturers. JIT may have reinforced these agglomerations by heightening inter-plant communications, the frequency of parts shipments, and the governance costs of specialized investments. Using Census plant level data I describe the shifts in inventories, productivity and inter-plant proximity over time and then test a number of production and inventory demand models for the period 1974-1988. The first six of the following eight empirical results are consistent, if not supportive, of the hypotheses defined at the outset of the thesis; the last two are inconsistent with these hypotheses: (1) The declining aggregate inventory-output ratio is due primarily to plants' individual inventory reductions and secondarily to growth in the market shares of plants with relatively small inventory ratios. (2) The measured productivity of inventories declines during the period 1979-1985; for some of the models estimated, productivity is associated with inventory reductions. (3) Plants that frequently introduce new nameplates secure significantly larger productivity benefits from inventory reductions than do those that innovate more slowly. (4) Parts manufacturer proximity increases the productivity benefits of inventory reductions and this effect may be growing over time. (5) The introduction of low inventory systems is negatively associated with proximity to parts plants after controlling for other variables. This negative relationship between inventories and proximity is growing over time. (6) The declining weighted average distance between assemblers and parts plants is due largely to the growth in the market shares of assembly plants located near parts manufacturers and the closure of assembly plants in the West Coast. (7) Holding assembly plants' market shares fixed, the average distance to parts plants is growing over time. (8) For most of the models estimated, the productivity effect of proximity to parts plants is negative and not declining in absolute value over time.

Books / Online / Dissertations & Theses

English

July 12, 2011

Thesis (Ph.D.)--Yale University, 1992.

Yale University.