Richard E. Caves

Richard E. Caves is Professor of Economics and Business Administration at Harvard University.

  • Industrial Efficiency in Six Nations

    Industrial Efficiency in Six Nations

    Richard E. Caves

    Industrial Efficiency in Six Nations continues the pioneering research begun in Caves and Barton's Efficiency in U.S. Manufacturing Industries, extending it to the international sphere and laying the empirical groundwork for a deeper understanding of the sources of inefficiency and their cost in productivity. This extended project is the first to apply the stochastic frontier production function routinely, with results that are both meaningful and sophisticated. Of particular interest are substantive results concerning the effects of exposure to competition, both domestic and foreign, and of organizational factors such as corporate diversification and unionization on productive efficiency. Caves and his colleagues investigate the gaps between average and best-practice efficiency of plants in the manufacturing industries of the United States, Canada, Great Britain, Australia, Japan, and Korea. They show that the resulting measures of industrial efficiency can be used to test many hypotheses about how efficiency differs from industry to industry. They confirm the generally favorable effects of competition on efficiency and also test many effects of organizational choices, while controlling for dynamic disturbances and sources of intrinsic diversity. They also explore what happens to the typical industry's efficiency over time, show how much and why the efficiency of large and small units differs, and probe the relation of the gap between an industry's average and best-practice efficiency and its international standing in average productivity.

    • Hardcover $82.00
  • Efficiency in U.S. Manufacturing Industries

    David Barton and Richard E. Caves

    Among studies of efficiency that have been conducted over the past three decades, Efficiency in U.S. Manufacturing Industries is unmatched in the breadth and depth of its coverage.

    Using the recently developed stochastic frontier production function, Richard Caves and David Barton estimate the degree of technical efficiency in nearly 350 U.S. manufacturing industries and explain the variation in efficiency among industries. They reach a number of strong conclusions, including the observation that import competition and flexible employment arrangements are beneficial whereas corporate diversification hurts efficiency.Caves and Barton describe and evaluate the stochastic frontier production function, which allows them to credibly estimate technical inefficiency. Using U.S. Census data on individual manufacturing establishments, they obtain the frontier production functions for over 300 industries. They then propose hypotheses derived from modern developments in economic analysis and theory which explain differences in efficiency. The hypotheses embrace many dimensions of competition and economic organization (both enterprise and labor), as well as sources of heterogeneous productivity levels such as capital-vintage differences, product differentiation, and differential rents to innovationAmong studies of efficiency that have been conducted over the past three decades, Efficiency in U.S. Manufacturing Industries is unmatched in the breadth and depth of its coverage. The hypotheses tested range more widely, and the analysis is extended to cover differences in efficiency among small and large firms and in the dynamic effects of efficiency differences on industries' rates of productivity growth. The review of the existing literature is unusually complete.

    • Hardcover $32.50