The role of technology use in the survival and growth of manufacturing plants

This paper documents the relationship between capital intensity, the use of advanced manufacturing technology, growth rates, and exit probabilities for a sample of U.S. manufacturing plants. It utilizes data from a unique establishment survey of technology usage that allows us to control for both the quantity and heterogeneity of capital in the plant. The main findings are that capital-intensive plants and plants employing advanced technology have higher growth rates and are less likely to fail. The effects are present after controlling for plant productivity and age; however, the technology results are sensitive to the inclusion of size variables.