Abstract
Firm-specific limits on capacity development rates (rates at which firms are able to increase output rate to design capacity) can affect firm performance in important ways, especially for firms involved in technological competition which introduce products relatively early. A simple model in which capacity development rates act in this way is developed and tested using data from semiconductor memory products (DRAMs). These results are used to estimate the ex post impact of increasing U.S. capacity development limits to the higher Japanese levels in the important 64 K DRAM generation.
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This paper was prepared as part of a larger project studying the cause of pervasive and persistent deficiencies in manufacturing performance and the causes of improvement in manufacturing performance in the U.S. and Japanese semiconductor industries during the 1980s. An earlier version of this paper was presented on January 4, 1992, at an Industrial Organization Session of the Allied Meetings of Social Scientists. The paper was improved by the comments and suggestions of the discussants at the meeting, F.M. Scherer and Philip Webre. It was further improved by the careful comments of Clement Krouse who organized the session as well as those of Richard Caves and Ruth S. Raubitschek, Sherri Goodman helped to assemble the data for computer analysis. Dataquest generously provided access to their data. The Division of Research of the Harvard Business School provided financial support. As usual, responsibility for all errors and omissions remains with the author.
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Flaherty, M.T. Manufacturing and firm performance in technology-intensive industries: U.S. and Japanese DRAM experience. Review of Industrial Organization 7, 273–294 (1992). https://doi.org/10.1007/BF00353397
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DOI: https://doi.org/10.1007/BF00353397