The Effects of Productivity and Demand-Specific Factors on Plant Survival and Ownership Change in the U.S. Poultry Industry

Abstract

In this paper we study the productivity-survival link in the U.S. poultry processing industry using the longitudinal data constructed from five Censuses of Manufactures between 1987 and 2007. First, we study the effects of physical productivity and demand-specific factors on plant survival and ownership change. Second, we analyze the determinants of the firm-level expansion. The results show that higher demand-specific factors decrease the probability of exit and increase the probability of ownership change. The effect of physical productivity on the probability of exit or ownership change is generally insignificant. Also, firms with higher demand-specific factors have higher probability to expand whereas the average firm-level physical productivity turns out to be an insignificant determinant of firm expansion.