Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 203: The Evolution of Manufacturing Technology and its Impact on Industrial Structure: An International Study

Bo Carlsson
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Bo Carlsson: Case Western Reserve University

Abstract: This paper shows that plant and firm size in manufacturing, and especially in engineering industry, in several Western industrial countries has declined since the early 1970s. Two hypotheses explaining the decline are advanced. One is "de-glomeration" or specialization: the divestiture of non-core businesses in order to free up scarce resources (particularly management time) to defend and nurture core business activities. The second hypothesis is that the emergence of new computer-based technology has improved the quality and productivity of small and medium scale production relative to standardized mass-production techniques which dominated previously.

Keywords: Manufacturing; specialisation; firm scope; technological progress

JEL-codes: L25; L60; O33

46 pages, December 1988

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