The Australian plastics industry : an economic analysis of technical change

Abstract

This thesis is a quantitative study of the Australian plastics industry in the period 1945/46 to 1967/68. A feature of the study is the construction of an econometric model of the industry. Particular attention is paid to the role of technical change in the industry's growth. An index of technology is derived from patents data and used in the model to measure explicitly the effect of technical change on both the demand for plastics goods and the demand for factor inputs. This analysis is conducted at the industry level. At the factory level, productivity variation is examined. Here the major purpose is to investigate the determinants of the residual variation of labour productivity left unexplained by variations in capital and labour : what in a time series context is referred to as technical change. Part One builds a composite picture of the industry as a whole. Chapters II and III examine descriptively the performance, structure, and development of the industry noting the origins of its technology in the multi-national chemicals industry. Chapters IV and V develop the basic statistical series required for a quantitative analysis of the industry's development described in Chapter VI. The econometric model presented in this chapter covers price formation, the demand for domestic and imported plastics goods and the demand for inputs. Part Two is concerned with the explanation of productivity variation at the factory level. The unsatisfactory performance of the convential two factor production function in explaining this variation is noted and a generalisation of the production function is offered to incorporate non-conventional factors such as management systems. A preliminary test of this function using published data confirms the need to obtain direct information on management and other non-conventional factors at the individual factory level. This data is generated through the postal survey described in Chapter IX. Chapter X reports the application of the new data on individual factories to the generalised production function. Specific attention is directed to the problems of analysing the quantitative significance of three of the possible determinants of productivity: the quality and skill of labour, the period of operation of the factory, and the vintage of the capital stock. Chapter XI draws some general conclusions and indicates areas for future research.