10/ Want to dig deeper?

Full paper: antras.scholars.harvard.edu/sites/g/file...

Short version for AEA P&P: antras.scholars.harvard.edu/sites/g/file...

Our six-digit NAICS measure of the APP can be downloaded here: antras.scholars.harvard.edu/sites/g/file...

Replication package available soon.

9/ Key takeaway: Production length is an important but overlooked aspect of production and firm behavior. We hope that our measure will find broader applications across fields.

8/ The negative relationship between APPs and capital costs holds across countries and industries. Even in sector-specific regressions, most industries show a similar pattern.

7/ Extending the analysis worldwide: APP rankings are highly correlated across countries. Some industries naturally require long production periods, regardless of where they are carried out.

6/ Industry correlations: Higher APP industries tend to be more skill-intensive but less physical capital-intensive. This suggests an interesting dichotomy between working capital intensity and physical capital intensity.

5/ Since 2006, APP in U.S. manufacturing has risen as the cost of capital has fallen. Our regression results suggest that about 19% of this increase is due to cheaper borrowing costs.

4/ Across industries and countries, APP is remarkably stable. Industries with complex production processes (e.g., pharmaceuticals, distilleries) have longer APPs, while perishable and commodity producers have shorter APPs.

3/ Using firm-level data from various countries, we confirm a key theoretical prediction: firms facing a higher capital costs feature shorter production periods. As interest rates rise, firms shorten their production lengths.

2/ APP is defined as a weighted average distance between the time a firm employs its inputs and the time these inputs deliver finished goods. In steady state, APP turns out to simplify to the ratio of inventories to the cost of goods sold (COGS). A simple yet informative metric!

Gràcies, Laia!

The great
Daniel Ramos-Menchelli will present a preliminary version of our new joint paper with Edu Morales on "Trade and Welfare under Oligopolistic Competition." We hope to post a draft soon, but here is a link to our slides: t.co/XcFgV3KszJ

And here's the abstract:

I will be presenting a new paper with Vitalii Tubdenov on "Measuring the Average Period of Production." We will post a draft very soon, but here are our slides: scholar.harvard.edu/sites/schola...